Have namechanged as so embarrassed about this - Dh knows he has been stupid and naive, but if anyone can advise on legal rights in this case would be very grateful, we are now struggling as have a 10k debt.
So, Dh started a company with his colleague, and they were both directors of the company. The co-director became increasingly difficult and intimidating with clients and dh was very unhappy about how the company was being run. Even though dh was a co-director he did not really act as the other guy's equal. After a few years, dh could see they were losing clients though the other guy's behaviour and wanted to resign. The company was not doing well at this point. Dh went to the company bank, and made sure before he resigned that the bank account was in credit. Then he resigned as director. However, shortly after this, the other guy as co-director took all the credit out of the bank, and then also all money from the overdraft facility [20k] and then he went into voluntary liquidation. Because dh had signed a personal guarantee to the bank, they came after him for half the overdraft debt - 10k - even though if was the other guy who had taken out the whole 20k - presumably he had kept the 10k and given the other 10k back to the bank.
So now we are 10k in debt, this went on a credit card. 10 k from our children's futures. Is there anything we can do to reclaim this money? I am presuming not but any advice gratefully received. Please do not flame dh - we know how stupid he has been but this is the situation as it stands.
He has a claim against the company. If that is insolvent then there is the possibility of a claim against the other director for wrongful trading but the costs would significantly outweigh the £10k. He should chalk it down to experience.
Why did he not speak to the bank about cancelling the personal guarantee when he resigned? Was he a shareholder too? He could try suing the other guy - but that will be costly and time consuming. To be honest he needs proper legal advice to find out what other liabilities he may have if he has given other guarantees.
the bank apparently refused to take him of as personal guarantee even though he was resigning as director - they said the other co-director had to take him off, which basically put him in an impossible situation.
I guess that is it - we would have a case for suing but the costs would be high - wonder if we could get a no win no fee thing.
You need some specialist legal advice. The other director is possibly in breach of his fiduciary duties towards the shareholders (if your dh was still a shareholder at that time) and could be sued for losses to shareholders.
because the guy went into voluntary liquidation, it seems as if the liquidator and the accountants were as crooked as the other director. Dh never saw accounts, there was never a board meeting, is there anything that can be done to investigate a business run like this, so totally underhand and illegally?