PG Settlement despite overseas property ownership
S & I set up a property business in the early 2000’s which expanded considerably but eventually failed as a result of the banking and property crash of 2008.
The directors had signed a number of personal guarantees, totalling some £900k, supporting the business debt.
There was some dispute on part of the guarantees as to their effectiveness, as a result of deed/ contract and past consideration issues. One director had assets which were mostly overseas but the other director had nothing.
Despite the contention referred to above, a substantial part of the alleged £900k could be argued to be due. As noted above, one director had no financial means of repaying any monies and the other had assets tied up overseas which were unmarketable, again because of the property crash.
The director with assets overseas did have a pension pot and the bank accepted in full and final settlement £115k on behalf of both guarantors, the director using that pension pot to fund the settlement.
We normally discourage individuals from using pension funds to make such settlements but with a bank that is willing to cut its losses, such a deal is occasionally worth considering if it means that everyone can get on with their life.
8 January, 2015 by Katie Lancaster