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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Person A and person B agreed to do a property development.

Customer Question

Person A and person B agreed to do a property development. They formed a company to buy the site (Site Company) and formed a company to do the build works (Build Company). A & B each took 50% shares in the Site Company. The Site Company the entered a loan agreement with a bank to buy the site in the name of the Site Company and to provide further funding for the build works that would be carried out by the Build Company. The Build Company was funded only by the Site Company's bank loan. The Build Company was owned by person B. Person A agreed to provide full bookkeeping and accounting to the Site Company and the Build Company and make all third party payments on behalf of the Build Company. This was agreed in a consultancy agreement between the Site Company and person A's company for which Person A could claim fee's from the Site Company (Consultancy Services) In order for person A's company to provide the Consultancy Services, the Site Company, Person B and the Build Company all agreed for Person A to be signatory and operator of the bank account of the Build Company. This agreement was verbal and was not part of the Consultancy Agreement. The Site Company made monthly funding payments to the Build Company with its bank loan for the purpose of building the site. Person A paid the Build Company's suppliers in accordance with the agreement, but Person A also paid itself fee's every month which he was only entitled to claim from the Site Company. This left a shortfall and prevented the development the Build Company from finishing the development for the Site Company - which intern prevented the Site Company from selling the houses Can Person B, the Site Company and the Build Company sue Person A personally for breach of fiduciary duty in respect the unauthorised payments Person A made to himself from the Build Company?

Submitted: 3 years ago.
Category: Law
Expert:  Ash replied 3 years ago.
Alex Watts : Hello my name is ***** ***** I will help you with this.
Alex Watts : Is this real life or for an essay?
JACUSTOMER-vl1as3op- :

Hello Alex, I appreciate your candour. This is indeed a real and current issue in which I am person B

JACUSTOMER-vl1as3op- :

When looking at my account it states this question is answered?