Guarantor of business loan

[MDGA]

Hi, I'm looking for advice regarding the status of a business loan guarantee signed in 2006.

The loan guarantee was signed by a director in 2006.
The director retired from the company in 2007. The bank was aware of his retirement and he was guided by his solicitor.

The loan guarantee was never dealt with by the bank or the solicitor.

A new director was appointed to the company. The 2 current directors signed off on audited accounts confirming that there was directors loans in place.
The retired director had no dealings with the company since 2007.

The company has now ceased trading and the bank are calling in the loan and chasing the retired director..

My question is...would the bank not have reviewed the loan since the retired director left?, would there have been new terms agreed on the loan with the current directors between 2007 - 2013. Should the bank manager have dealt with the retirement in 2007...

Any advise appreciated

 

[Negotiator]

From what I can see here, the PG by the original director is still in place and most likely wasn't changed by the new directors, why would they?

I'm not entirely sure of the legal position on notifying the bank of the change of directors if there is an obligation on the bank to restructure their security or at least try to but I sincerely doubt it. I see it as a PG like any other and why would the company structure make any difference to that. It would be more a matter of what agreements you did with the new director like indemnifying yourself against any claims on the loan etc but the banks will still chase you and you'd have to chase them etc so very messy.

If you provide the details of the loan it would help as depending on the size of it they might not chase you for it given the circumstances etc.

 

[Palerider]

Unfortunately it seems that you are liable really due to a lapse on your part in not writing to the Bank to release you from your guarantee when you resigned as a company director.

The Bank may or may not have agreed to release you from your guarantee had you written to them and may or may not have requested the Ltd Co. provide adequate alternative security which would have to have been acceptable to the Bank prior to them releasing you.