Thank you. This situation is difficult potentially. There is a consderable body of case law in respect of personal guarantees given by directors. The general direction of these decisions is that resigning as a director is not sufficient to end liability under any guarantee unless there is a specific provision in the guarantee that provides that the guarantee is only valid for a period in which you act as a director or officer of the company. Such a condition would be comparatively unusual but it is worth checking the guarantee in detail to ascertain whether such a condition was included.
there is authority to suggest that if you contact the company the benefits from the guaranteed to indicate that you have resigned and do not intend to guarantee any further liabilities under the guarantee, should the company then subsequently increase those liabilities to the company, you would not be bound under the guarantee in respect of those additional liabilities but from what you say, this did not happen in this case.
In terms of going forward, certainly it would be worth you considering contacting the company in writing to advise them that you have resigned as a director and you will not be liable for any further liabilities under the guarantee from the point you resigned though as above, this is unlikely to have effect retrospectively though it can be of effect going forward from this point should be company further increase liabilities to the company relying on on the guarantee.
clearly in respect of any liabilities you incur in respect of the guarantee, you will have an indemnity in this respect from the company that this of course is reliant upon the company remaining solvent and having sufficient funds to repay anything that you pay under the guarantee. Equally it may be possible for you to agree with another director to indemnify you under the guarantee personally though this would seem optimistic.
Ideally you will be able to negotiate payment terms with the creditor which the company can afford to service without making it self reliant upon you. If this is not possible then in default of the above, you may wish to seek some security from the company over any assets it holds in the event that the company subsequently becomes insolvent leaving you holding a bill under the guarantee.
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