urgent legal advice needed to navigate a court hearing

[AngelaKennedy]

I am an ex Director of a company that was run and owned by my childrens father - we have twins age 9. We have not been together for 5 years or more. The company dissolved in 2019, and I resigned in 2018. I have worked PAYE all my life for other companies, never had a controlling position in the company and never had access to the accounts.

I am now being requested to attend a court hearing as an ex director of this company as they are looking to recover costs, as part of the liquidation. as part of this the liquidators are looking to force a sale of my flat, my only asset. We are currently not living in this flat as I had to move out as the dad wouldn't move and I couldn't stand it anymore. Now 5 years on, and having got him out of the flat I am being asked to pay for his director debt aswell as my own. His directors debt would basically be all my profit gone from the flat.

I didn't ask for any of this. I have put up with an abusive situation for 15 years, and now I am being asked to pay for debts I never knew about. My court case is on the 10th January and I have no idea where to start. I did visit a solicitor and together we came up with a strategy that basically means I take responsibility for my £10k Directors Debt and dispute the other Director Debt which comes to around £70k. I can't afford a barrister, and the advise I took from the solicitor quoted me £8k to represent me, to make a skeleton argument and to gather evidence etc. and for the barrister to represent me in court.

Would it make a difference if I lived in the flat they wish to force a sale on? as a mother of twins, would this safeguard my asset as our only home? the only reason I a renting a place was to move out of it because the kids dad wouldn't move. I had to threaten him with bailiffs and remove the interest for him to move. He is abusive and has been controlling me financially for 15 years, and it feels like there is no end in sights. He has since declared himself homeless, which is whey I am being chased for his directors debt.

any advise to navigate this would be much appreciated.

Have you spoken to the liquidators or their solicitors? They would have written to you before going down the recovery action through court route.

If you haven't, I would now. Explain to them what you have said here.. As someone else has mentioned, as a director you have certain responsibilities, including those regarding any debts which accrued before you resigned, so whilst speaking to them might not stop the recovery process, it might put it on hold and give you some time to seek further advice. Ultimately though, yes, you can be held accountable as a former director.

On that note, when you resigned, did you file the necessary paperwork with Companies House? I think it's form TM01. If not, you can be held accountable up to the date of liquidation.

Sorry it's not what you wanted to hear

Just say you didn't sign them

Do you get what I am saying?

You didn't do it.

@AngelaKennedy

You were having ivf and being abused and you didn't know this was happening

Was anyone there to witness you signing?

If not say you did not do it

You owe ex nothing

Fuck him the nasty bully

The problem with telling the OP to say she didn't sign paperwork if she actually did, is if this does go to court, she'd be telling lies under oath. Not something you want to encourage a vulnerable poster to do

Please do not commit perjury which is what is being suggested above. That really will not help!

Im a lawyer, but not in this area. I don’t know if the whole coercion would amount to a defence or if directors responsibilities are strict liability (and possibly you have to instead bring a claim against your ex). I think the latter sadly but that is only faint memory/educated guess. I very much doubt your ex’s agreement to take on all liability will make any difference if he doesn’t actually have the funds to discharge that liability!

That’s why you really need to try and afford specialist advice to see if there is any way to save your flat.

Also true
I suppose you're right

Don't lie OP

But I think you have to face the music and revisit the abuse in your relationship at court because it needs to come out. This will help you to protect your children

Did you directly benefit from being a director? Did you draw down a salary/ dividends?

it's okay, I'm not going to lie .. @stopbeeping that's a promise. That is not my style.

@Cornelious I did not benefit from being a director and nor did I take a salary from this. it's all just horrible right. I'm going to loose everything me and the kids have, literally everything stolen from us having worked PAYE all my life and having had nothing to do with 'said company'. very sad story.

@AngelaKennedy as you've not received a salary/ dividends perhaps this will go in your favour?

@AngelaKennedy

Please try and contact the liquidators and/or their solicitors and tell them what you've said here. It might not make any difference but there again we don't know that and it's worth trying

@AngelaKennedy im pretty sure you can look up all Ltd company documents on the companieshouse.gov website to see if you DID sign anything? This includes the original incorporation and subsequent accounts etc

Some people are getting stuff mixed up, a commercial litigation case is just this and the laws around directorship clear. With no resignation of position, no reporting to police, no history of domestic violence on record then it is impossible for you to get out of this, unless you go to the police now with your evidence and try to then use this police investigation in this law suit to halt it,. If you refuse to do this, then you have no chance.

you would also need to prove you were so abused you were unable to function, That you had to do what he said and as such were negligent in your directors duties. But if you won’t go to the police, then this is impossible. They aren’t going to let you off with the deck based in your word. You need to go to the police and Start an investigation now.

Hi OP. This is really complicated, and I know you want to forget about it and move on, but that will just make things worse.

lots of people sign on to be directors without understanding what it really means. As a director you are responsible for fulfilling your directors duties (Google them), if you don’t and that causes loss to the company you can be liable. The liquidators have a duty to do the best they can for the creditors and you have assets whereas your ex doesn’t, hence they have to try and recover if they have a case against you. Unfortunately you didn’t fulfil your duties -i understand why, but that’s not a defence- so they are doing what they have to.

you said you took out loans in your name. The liquidators wouldn’t have anything to do with things on your name, so it must be something else they are looking for.

did you by any chance give a personal guarantee for the company’s borrowings? If so, then if you can produce evidence of the duress, and/ or you didn’t get independent advice form a solicitor, you may have a case to get out of that.

It may not work and there isn’t really a legal basis, but I would do as PPs suggest, write a note about the relationship, get as much evidence together as you can, set out that you were abused and it was done under duress and force and he kept you out of everything and abused you to keep you quiet. I would follow that with that you have kids and this action will make them homeless (sad face papers case here). Also set out that you really don’t have any assets- given the sums of money involved it is unlikely to be worth them dealing with the drama and reputation damage of going through with it.

Good luck.

Hi OP. Not sure if it's been mentioned, but for direct access to counsel, try Clerksroom

I would hate for you to get in trouble from my bad advice
I just feel the rage inside of me for you and how awful awful awful this is for you
Sending you so much love and strength

This misses a key point, this is not a jury case, it’s likely to be effectively a closed court with a judge presiding and deciding, there shall be no hearts and flowers. It will be lawyers and a judge, and the court will apply the law. This is their job, it isn’t emotional oh look at that letter. It is commercial law. It is a simple interpretation of your legal liabilities and then an appliance of that in accordance with the law.

With no criminal case or police investigation into abuse or coercion either now or ever. It won’t be taken into account past “ how sad” . All the notes in the world won’t change it. It will be as relevant as writing a note saying you cured cancer and can fly to the moon.

The judge will apply the law.

What a horrible situation. Have you any family you can ask for help. This is the type of situation I'd want to help my kids out with if I could afford to.

@Fragrantandfoolish I’m not suggesting it is a jury case- juries have to apply the law too so it would make no difference.

The point is the liquidators are commercial, so if it’s not financially impactful in overall terms and they can be persuaded it is more trouble than it’s worth, they may (note I said may, here and in my original post) work. No guarantees, but worth a try.

what’s your suggestion?

Unfortunately being a Director is a little bit different to being an employee. You have duties that you owe to the company and it is not a defence to say you didn't know what was going on. You should have known what was going on, you were a Director and it was your duty to know.

It's too late for you but if anyone else is asked to be a Director for someone else's Company and you don't plan to be engaged with the business, for goodness sake don't. The risk is huge.

@AngelaKennedy I'm hoping you are not a Director in any other business. It's unusual for Directors to have to settle debts of the Company and would imply some sort of wrongdoing, which means you are likely to also be banned from being a Director for a time.

Liquidators have a duty to recover assets in order to get the best return for creditors of the company. Directors can be held personally responsible.
We don't know if the claims relate to something which accrued during the time the OP held office. It might be an overdrawn directors loan account (which is a company asset) but that's not really clear.
We don't know if the OP has filed her resignation with CH. If she hasn't done this, she hasn't officially resigned and will be held liable up to the point of liquidation.
The court case will not go away BUT if she hasn't already engaged with the liquidators or their solicitors, she needs to as a matter of urgency. They may (ànd it is only a may) allow her time to seek further advice. They may accept a repayment proposal (although they will have written to her about this prior to handing it over to their solicitor, who will also have written to her prior to lodging with the court). None of us can predict what they might or might not agree to but if she doesn't make contact with them neither will she. And then it will go to court as planned.

if it is perhaps an overdrawn directors account, might this be made up of items that were for the benefit of the ex rather than the OP? would that be material at all?

It isn’t clear to me the basis on which money is being sought from you. Did you give a personal guarantee for company borrowings? This is important because that is a separate matter than alleged failure to discharge your Director duties.

But she resigned a year before the company went into liquidation

She says she resigned but hasn't confirmed if she filed form TM01 with CH.

If she hasn't done this then she hasn't officially resigned