Asset Lease Personal Guarantee signed pre 2009
G was being pursued for 141k on a personal guarantee relating to asset lease finance on plant and machinery following the liquidation of a company.
Asset lease agreement personal guarantees can be notoriously difficult to contest, particularly as they are often indemnities dressed up in personal guarantee clothing.
However, as is so often the case with many personal guarantee issues, the failing point on the personal guarantee is not the personal guarantee itself but the circumstances surrounding the personal guarantee and indeed the documentation surrounding the money that is owed.
In this case the issue is an asset finance industry wide problem, in that almost all of the asset finance agreements signed prior to 2009 had a fundamental flaw in the asset lease agreements themselves, which was that there were termination cost clauses which were deemed to be unfair financial penalties and therefore could not be enforced.
Quite often, the substantial part of the value of a claim on a personal guarantee by an asset finance lender can be made up of these charges and in this case this issue resulted in a settlement of 66k.
30 January 2015 by Katie Lancaster