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Ash
Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Director A and Director own Company A (50/50). Director

Customer Question

Hi - Director A and Director B own Company A (50/50). Director A takes out a business loan and uses his own property as a guarantee for the loan. 5 or so years later Director A gives his shares to a new Director C and leaves the company. The high street bank removes Director A from the bank mandate. Director A asks for the guarantee to be removed and passed to Director B and C.
The high street bank fails to remove the guarantee with Director A and doesn’t obtain any guarantees with B or C. Company A has now gone in to liquidation. The high street bank are now chasing Director A for the outstanding monies.
Can the high street bank chase Director A for the monies owed?
Thanks,
Darren
Submitted: 2 years ago.
Category: Law
Expert:  Ash replied 2 years ago.
Hello my name is ***** ***** I will help you.
Why didn't A seek to get removed as guarantee?
Customer: replied 2 years ago.

Hi Alex - Director A (like Directors B and C) thought that the bank had removed him as this was stated in various emails with the bank.

Thanks,

Darren

Expert:  Ash replied 2 years ago.
Did the bank say they had removed him?
Customer: replied 2 years ago.

No. They said they would speak to directors B & C about it but didn't.

Expert:  Ash replied 2 years ago.
It's bad news I am afraid, It was down to A to make sure he was removed so sadly A is liable until the bank release him. The bank is under no obligation to release A so that is why it's A responsibility to chase up and make sure he is removed.
So yes the bank can chase A as he is a guarantor,
I am sorry if this is not the answer you want and certainly not the one I want to give you, but I have a duty to be honest.
Can I clarify anything for you about this today please?
Alex
Customer: replied 2 years ago.

Thanks Alex. Sadly this is what I thought.

Expert:  Ash replied 2 years ago.
I am sorry.

Alex

If this answers your question could I invite you rate my answer before you leave today.

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Expert:  Ash replied 2 years ago.
Hi

I am just following up to see if there is anything else I can help with?

If you have not done so already might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.

Alex