Safe as houses II
29 June 2021: In a recent article we told the tale of a company, formed in 1966, which, through its directors, had strayed from the straight and narrow path and the directors have now been disqualified from being directors.
Having a company with a long trading history and good credit references can be attractive to those who might like to take advantage of the opportunities such things can bring.
A similarly aged company we dealt with a couple of years ago was just about “washing its face” when the husband and wife directors decided that it was time to call it a day and to look for possible buyers. They lived next door to the trading premises and didn’t expect the business itself to be worth very much but, they hoped, if they could sell it as a going concern then the rental payments for the premises, that they now owned outright through their pension, would keep them in a comfortable enough lifestyle. They just needed a bit of luck.
They quickly found a business owner who wanted to buy their shares. He was in the same trade but based in another town in the next county. They couldn’t believe their luck – this looked to be the perfect deal. They booked their cruise and, as soon as the deal was done, embarked on a trip of a lifetime.
Sadly the new shareholder neglected to tell companies house about the expected change in directors. He also began ordering materials, through the business, for use in his other businesses. A number of the suppliers credit limits were exceeded but, this being a long established company that had always been “good for it”, the purchases were processed.
Just a few short weeks later, the cruise was over. The original directors returned to find, much to their surprise, that they were still at the helm. Their white-knight purchaser had simply walked away. The company creditors were looking to the couple, still on the hook personally, thanks to their guarantees, to sort them out. The employees were looking to get paid their wages.
Sadly the much hoped-for comfortable retirement that they thought had been secured did not follow and we were required to step in to help them sort things out.
If you are concerned about your role as a director or about the conduct of directors you are currently dealing with, please contact any one of BRI’s experienced management team for free initial advice with no obligation.