Other claims against directors

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Overview – different types of claims

Other types of claims we regularly advise on include.

1. Personal guarantee claims

Directors are often asked to give personal guarantees or indemnities when the company is looking for a new finance agreement or an extension to the current terms. Guarantees can often be for limited amounts, but the indemnity element can be unlimited.  When the company enters insolvency, the financier often turns to the guarantors for repayment.  

We can help by

• considering any defences to the claims – such as duress or misrepresentation.
• negotiating repayment plans;
• putting you in touch with brokers who might be able to obtain alternative funding;
• defend claims for repossession against your property
• defending the threat of bankruptcy proceedings.

2. Piercing the corporate veil

Sometimes directors cannot rely on the protection of the limited liability of a company. Sometimes they might face claims

• relating to misrepresentations made by that director personally to sell a product / service or engage a supplier to the company (which may be fraudulent misrepresentations where they knew that the supplier would not be paid or would suffer a loss as a result of such misrepresentations)
• or claims by shareholders arrange for contracts to be entered into in the company’s name with the knowledge they would never be fulfilled, solely to gain a personal advantage

3. Group company claims

Similar types of claim arising where there are group companies, all using the same trading name and the identities are merged (perhaps deliberately) to either confuse or avoid any proceedings being brought against the directors / shareholders personally.

4. Common law claims – breach of trust, deceit etc

A director holds duties owed to various stakeholders including:

• the public generally
• creditors
• shareholders
• other directors
• employees

As primary management they also act as trustees solely responsible for deployment of the company and its assets for the benefit of all of these stakeholders.

As a result of such trust obligations there also arise various common law obligations to treat the various stakeholders properly and not to abuse this position and ensure there is a duty of care and good conduct when a director performs his/her role.

Whilst we cannot predict every type of claim arising under this heading, at Francis Wilks & Jones we have considerable experience dealing with claims against and defences of companies, their directors and shareholders. Should you require any assistance, please contact our director services team who can discuss such matters with you. Or speak to partner Stephen Downie or Maria Koureas-Jones today for immediate assistance

One of the most astute appointments I have ever made.

A company director we successfully defended against disqualification

I have found FWJ to be perceptive, to the point and realistic. They have been able to assimilate and forcefully defend a very aggressive claim with very limited historic information.

A client we advised on a complicated property and partnership dispute