Bank manager committed customer to sign PG one day and pulled the business the next
Our client was a director of a group of companies going through some cash flow issues.
A refinance proposal had been put forward by the group and the bank manager had called the director in to discuss the proposal.
The bank manager said he was sympathetic to the proposal and on that basis asked the director to sign a £650k personal guarantee, which the director did at that meeting.
The very next day the bank pulled all the funding on the group and attempted to claim against the personal guarantee.
The claim failed in its entirety as the director was clearly induced by the bank manager to sign the guarantee on a basis the bank would support the refinance proposal which it had in fact no intention of doing.
Despite other bad practices the banks have received criticism for, this sort of action is thankfully rare and for the most part consigned to the history books, along with the other more common early 1999s practice of encouraging business owners to sell their homes on the premise of the bank providing non going support only to pull the funding as soon as the proceeds of the sake of the house were in the banks hands.
14 May 2015 By Mel Loades