AlexWatts2013 : Hello my name is Alex and I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return.
AlexWatts2013 : Is there any form of partnership agreement please?
yes I believe there is a partnership agreement however I have not had sight of it. Essentially the nub of the problem is that if my brother pays off the debts of the partnership he cannot sure that his partner will repay his share when his partner sells his house.
AlexWatts2013 : Yes I underatand. It's bad news I am afraid. He is jointly and severally liable for all debts of the business. This means he is liable for 100% jointly with his partner. So even if he pays 50% he is still liable for the other half unless there is a partnership agreement that states he is only liable for half.
AlexWatts2013 : That is not to say if he discharges more than 50% he could take his ex partner to court for that share. But as it stands each partner is liable jointly for the whole sum and not just half.
AlexWatts2013 : Any creditor is likely to go after the person with the biggest pot of assets or money. Therefore your brother should think very carefully before selling property if it does not guarantee he would be free.
AlexWatts2013 : I realise this may not be the answer you want, nor the one I want to give you but I have a duty to be honest.
AlexWatts2013 : Can I clarify anything about this for you today please? Alex
Yes I understand about the joint liability..... and this is not the point. the 2 big creditors Lloyds and Santander are getting upset and wanting paid. Their penalties are building up, increasing the debt further. My brother has a buyer for his house he owns, he can pay of the Lloyds loan and Santander mortgage both are (for the purposes of this discussion) the same size @ around £320k each. His business partner is planning to put his house on the market, but if he does not, he will be left with his house and my brother, having paid the debt in full, left with nothing.he could have a fight on his hands top get any m
Sorry - stupid system did not let me do carriage return....... as I was saying, my brothers business partner is planning to put his house on the market, but if he does not, he will be left with his house and my brother, having paid the debt in full, left with nothing. My sister in law has drawn up a schedule and what I'm looking to try and do is to ensure that the 2 partners are going to draw up a properly signed and witnessed legal agreement that
resolves to wind up the partnership and resolve the financial matters as laid
out in the repayment schedule within the specified / agreed period of time. Is this a realistic course of action? What form should the agreement take?
AlexWatts2013 : Yes but then the creditors are likely to go after the partner because he has an asset. You can get an agreement but it should be clear that the other partner once 50% had been paid by your brother indemifies and holds harmless your brother for any other liability, penalty, fee or otherwise as a result of the business.
AlexWatts2013 : That means if creditors pursue your brother in court he can counter sue his ex partner.
AlexWatts2013 : But an Indemity clause is what you need. It will not stop your brother being pursued but if the matter goes to court he can counter sue his ex.