Bank Debt problem(how to handle)

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Gerry Canning

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I have changed names etc , but problem is largely as I state.
..............................................

Mr Bank lent Jim k150 in 2007.
the k150 was used in business by Jim,s brother Tony.

When Mr Bank (in fluffy times) lent the k150 , the loan form was given out to Tony to take away to have Jim sign.

Form was returned with a signature purporting to be Jims ie real borrower.
Said signature was witnessed by Mr Bank official.
Signature is neither by Jim or Tony ?

Todays issue;
Mr Bank wants his k150 back.
The money was used by Tony, not the purported signor Jim?
This would appear to have been rules slackness in our (fluffy) times by Mr Bank and Tony.
There was , as far as I can see, no wish to defraud and that at all times funds were to be paid back.
Upshot is that Tony has lost in the downturn and no funds are available to repay Mr Bank!

This is now a tricky one.
1. Jim , never signed.
2. Jim,s signature has been witnessed by Mr Bank.
3. Tony has used the funds.
4. Tony has nil funds to repay.

Mr Bank now wants this sorted ;
I assume they will say they are not aware of signing issues (or will not admit to it).

Questions;
1. Where does this leave Mr Bank V purported borrower Jim.
(I assume Jim cannot be touched).
2. Tony used the funds in good faith in that he intended repayment,( it was not his signature, so whilst he used funds where does he stand).
( think Mr Bank in rush to lend turned a blind eye!, I think they knew Jim was in New Zealand)
3. In the real world can Mr Bank do anything other than huff & puff?
From my reading Mr Bank have just lost k150?

Would welcome advice on how I proceed with Mr Banks recovery section.
This old loan looks like a classic mess from the fluffy times!

I would appreciate any guidance.
 
Was there any security explicitly mentioned in loan docs.
Is the loan doc perceived as including a personal g/tee?

My view would be try and get to the point where they produce the papers that they will try use in court to see both their thinking and the strength of their hand.
[@@@ hours community service perhaps.:) ]
 
It's down to whether the judge believes Mr Bank vs Jim on witnessing of the signature. If Mr Bank tells the truth then I don't know what would happen but he could still sway a judge by saying he accepted it in good faith (Mr Bank stating he assumed Jim's signature was genuine).
 
Well on the face of it, the loan was acquired by fraud and the criminal law could apply. Someone signed the application purporting to be another person and it looks like 'Tony' acquired the funds by deception, irrespective of whether he intended to repay them.
 
This is fairly easy and you are getting hung up on irrelevancies.

The judge will ask some simple questions:

The bank paid the money into someone's account.

To whom did they pay that money?

That person is the liable person.

Presumably they sent statements to that person.

Presumably that person made some repayments.

Presumably that person is only questioning the signature now?

I am not sure what you mean by fluffy? It seems to me that your friends are trying to escape their obligations.
 
Gerry it sounds like a total con from start to finish by your clients. Surprised you're posting it up here. Maybe they are conning you too with their tale of woe about banks.
 
Bronte;Brendan;
Points taken.

Not conning me; put it on AAM just to see if my views which I didn,t give on original post are fairly indicative of your replies .
So thanks for the responses.

1. Clients John/Jim have got Mr Banks funds with the connivance of Mr Bank official by dubious means.
2. I do believe that since Jim never signed he is home free!
3. I do believe John (user of funds) has acted poorly. I do not see provable fraud , in that fraud is very hard to prove in court.
4. (fluffy) Just that in the boom , normal rules were overly bent/stretched by Mr Bank.
No tale of woe atall! . These boyos are hard nosed enough!

I just think that twix huff&puff Mr Bank will whistle for their funds.
 
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Hi Gerry

2. I do believe that since Jim never signed he is home free!
Click to expand...

Did the money go from the bank to Jim's account?

Therefore the court will decide that he owes the bank the money. What he did with the money - i.e. gave it to John, is just not relevant.

if there was a peculiar clause e.g. 20% interest rate, then they might have difficulty enforcing it.

If it's a normal contract, the court will uphold it.

Brendan
 
Brendan;

I deliberately havn,t yet got into who got funds in what way .
I will be looking for copy contracts and then funds trail to see who spent what.
I understand funds went to Jims account but was accessed with his authority by John.
Bank may well say John ended up beneficial user of said funds by (circuitous) route? but I see no provable intent to defraud (or at least a provable fraud).

This is not a normal contract so ??

Will keep you posted.
 
As I have already said, you are getting hung up on the wrong issue.

The bank gave Jim a loan which they paid into his account.
He cannot deny that he got the loan.

The forged signature on the side contract is just not relevant. It only means that the bank would be unable to enforce some minor aspect of the loan. The existence of the loan is proven. Jim would be very stupid to deny that.

"I will be looking ...funds trail to see who spent what." Who spent what is just irrelevant. What he did with the money is not relevant. Leave John/Tony out of this completely. Jim may have a case for recovery against JOhn/Tony.


Jim has no defence here. He can't deny he got the money. He presumably applied for the money.

If AIB lodged €150k into my account which I had not asked for, I would tell them to take it back. I would not give it to my brother for his business. And then 7 years later, deny that I had asked for the loan.

Gerry, you and your client need to get real here. Jim could really damage your reputation making you look like a cowboy.
 
Folks , thank you all for your inputs , they tally with my own thoughts.

There is a large extended family Bank linkage.
I think Mr Bank (bent) rules because of this.
I feel there was no fraudulent intent on behalf Jim/John.
I feel Mr Bank acted in good nuff faith ,albeit stupidly.
There is no security.

It is messy and I think I will pass on it , unless I can get all parties into , without-prejudice negotiations.

I am well aware and careful of my own good name, again thanks for reminder to watch out!
 
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