Advice on legal action against banks

I

Incapriest

Guest
Hi all

New to this, but I was hoping for some advice.

A few years back, myself and my business partner needed to increase out overdraft with our bank. We met with the bank and all was well. We signed the guarantees as directors of the limited company.

As things go, we still owe them the money, only now they are claiming that we signed as private citizens (and so the guarantees became personal guarantees).

We were told (only told!!) during the meeting that we were signing as directors of the company.

Now:

1. We did not sign a disclaimer (which they sent to us two weeks after the meeting)
2. It took five months for a copy of the agreement to be sent to us ( and only after numerous calls and faxes).
3. We were not advised by the bank to get advice of a solicitor and now…

They are saying that we are personally responsible for the remainder of the OD.

Anybody else ever in this situation, or anybody out there with some advice on this. We’re thinking about taking this to court, but that’s going to be very costly and hey, if we had the sort of money to take on a bank in a legal battle, we’d have repaid the sodding overdraft.

 
I'm pretty certain that you would lose any action you might take for the following reasons:

1. The money is due.
2. You signed a guarantee.
3. What use was the guarantee to the bank unless they could enforce it against you both personally? I do not understand your explanation that you signed the guarantee as directors and not personally.
4. You would not normally expect a bank to advise you to go to a solicitor where you are signing guarantees.

What is likely to happen is that the bank will sue the Company and join you as guarantors. At that stage you could try and defend but.........

mf
 
mf1 said:
1. The money is due.

The contract contained the name of the company, but did not list our names. The o/d was taken by the company, and not by us as individuals.

2. You signed a guarantee.

Again, as company directors, against assets of the company, not against personal assets.

3. What use was the guarantee to the bank unless they could enforce it against you both personally? I do not understand your explanation that you signed the guarantee as directors and not personally.

Sorry MF, but whats the point of a limited company? The company approched the bank, not us as private individuals.

4. You would not normally expect a bank to advise you to go to a solicitor where you are signing guarantees.

We were forwarded a waiver several weeks after signing the contract stating that we had agreed to the contract without seeking legal advice. We have not signed this, and any legal advice we have sought since then on this matter has stated that there was subterfuge on the part of the bank.

Basically, the company signed this contract, but now the bank are stating that we as individuals signed. This doesn't seem correct to us and as such, I'm hoping for some more constructive advice.
Click to expand...

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I'm sorry you don't like the advice. I'm a solicitor - that is the advice I would give a client.

I do not understand why you think a guarantee you signed should not be enforced against you. The debt due by the company would be enforceable against the company and its assets. The guarantee could only be personal. The days of limited liability with no recourse to guarantors are long gone. As you say what is the point of a limited company? Turn that around and ask why would a bank choose to do business with a limited company ( particularly one which now has financial difficulties) without a personal guarantee? You and your business partner cannot expect the Bank to take the hit.

You're in business, your company got the money and you guaranteed its repayment. I do not really see subterfuge anywhere.

mf
 
must agree with mf1. In my view, you signed to give a personal guarantee and are now looking for a loophole to get out. it is only human that you try to do so, but I think you are stuck.
 
IncaPriest

You should most certainly ignore the unconstructive advice of MF1 and Ravima.

Shop around until you find a "constructive" solicitor. They are very rare. But I am sure you will find one eventually to take your case for you. Unfortunately you may encounter around 100 uncontstructive solicitors along the way, but sod them.

Make sure that you don't sign any contract with the "constructive" solicitor, so that when you lose your case, you will be able to sue them for bad advice.

The banks are in the business of lending money. If people, sorry companies, don't pay them back, that should be the bank's problem, not the hard pressed Irish entrepreneur who has lost money or overpaid himself.

I think MF1 and Ravima are typical of the negative tendency on Askaboutmoney recently. I think we will bring in a new Posting Guideline. "All replies to questions must be constructive i.e. only give the answer that the questioner wants to hear".

Brendan
 
Incapriest - What was your understanding of the purpose of the guarantee that you signed?
 
incapriest,

could you claim that you and your business partner were idiots when it came to the contract you signed? (judging by your understanding of what you signed this seems a reasonable assumption).

then could you argue that agreement was an 'improvident settlement'.

i dont remember the ins and outs of this - but from my college days - i think its basically where one party takes advantage of another (the 'other' being in a weak position and without independant leagal advice), not sure if it would apply in your case. If memory serves, and i'm going back a long number of years here, there is a wee bit about this in the Irish Jurist - 1976.
 
brandan, I do not want to get into an argument, but I understood that hte purpose of this BB was to assist people. I agree that it is always possibel that you will find a solicitor who will take the case, even on a 'no foal no fee' basis. however, my honest opinion is that this is a hopless case and in the even tof taking legal acion against hte bank and losing, then you are only incurring more costs and expense. you might no have to pay your own legal costs, but you will certainly have to pay the banks, if the judge awards them. In most cases, he who loses, pays.

if my postings are considered 'negative', then I am sorry. I have managed to obtain some great assistance in this BB and I woudl say with hand on heart, that i have never tried to be 'negative' I have at all times been upfront and honest.

I will reftain from posting in the future. Sorry if I have upset you. you have more postings, so I bow to your superiority of ranking.
 
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