Investor Says He Is Not Liable after Selling His Company

xylophone

I gave them money

But how was this set up? You don't just "give" money to a company or individual who comes knocking at the door?

Do you know the people involved personally? Were you cold called?

It may be that you have been a victim of fraud as others have said and will need to contact the police.

maximumme

I know them personally yes, they "were" close friends

xylophone

And what does your agreement with these friends say? Or is there absolutely nothing except your bank statement showing a transfer to the friends'/ the friends' company's bank account?

maximumme

All I have is around two dozen emails starting with him asking if I will invest, how much he needs, what the money will be spent on, and when and how much I will get back.

A.Galloway

And that is why you don't do business with friends/family. I didn't even allow my own father to invest money in my company when I set it up.

It all depends on how the money was invested. You can't just give a company money. There has to be some sort of agreement. Like shares or loan etc

A.G

princeofpounds

The answer to your situation is not straightforward because you have not been precise, in practice as well as in the recounting of the story, about what the money was for. You will probably need legal advice to untangle it but a professional should be able to do so.

The following information would be useful:

Was the money a loan or an equity investment? I.e. was it conditional on the performance of the business in some way or were you due a fixed repayment?

Did you transfer the money to him as a person or to a business? Was your contract with him as a person or a business?

If a business, how is this business incorporated? Is it a limited company or a sole trading business, or some other form?

If a limited company, have to looked at their records at companies house? What do they say? Who are the directors?

Have you checked the land registry records for the properties? Who owns them? Have they been sold at any point?

You see, the answer you get will depend a lot on whether there really was a business operating here or not. If not then you would be in a strong position to attack him personally. If so, then it might be harder to 'lift the veil of incorporation' (google it) but you may still be able to attack the company directors.

princeofpounds

Sorry, regarding the question of loan or equity, really I should be asking if you ever received any share in the company or not.

jimjames

princeofpounds wrote: »

Sorry, regarding the question of loan or equity, really I should be asking if you ever received any share in the company or not.

The OP said they didnt get any shares so it is some other form of loan or gift

maximumme wrote: »

No, I am not a shareholder. There is no mention of the money being secured on their assets.

racing_blue

maximumme wrote: »

18 months ago I invested £30,000 with a property refurbishment company.

The company I invested in has now been sold, and subsequently closed down.

Imagine a friend told you the same thing- but replaced the words in bold with Jessops, or HMV- or another company that had placed in administration. What would you be thinking?

maximumme wrote: »

The original owner says he is not liable to refund my investment even though he still owns the 2 properties and still rents them out. When he sold the business, he kept the 2 properties. This cannot be right surely?

Staying with your friend, would the previous owner of their shares be liable to refund their investment?

Say an arrangement is reached where there is a management buyout of heavily discounted assets. Would the new business be liable for your friend's investment in the old business?

I'm sorry that these thoughts will be of no comfort to you. The reason for posting is that perhaps you can point out ways in which your situation differs materially from the above, as then it might be possible to offer more hope?

Best wishes- sounds like a tough situation

gadgetmind

maximumme wrote: »

All I have is around two dozen emails starting with him asking if I will invest, how much he needs, what the money will be spent on, and when and how much I will get back.

My unprofessional view is that this is plenty enough for a contract to have been established.

By accepting the money, this is partial execution of said contract.