Investor Says He Is Not Liable after Selling His Company

spacey2012

This is a matter for the police fraud investigation unit.

thenudeone

gadgetmind wrote: »

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.

I would agree with that, but it's not clear whether the party to the contract or the recipient of the funds was the friend's company or the friend as as individual.

If the correspondence was from an individual and it doesn't state that a company was to be used as the means of investing, and the OP simply paid into bank details provided without knowing whether it was a company or individual bank account, then the individual is probably the one who has "borrowed" the money from the OP, and against who legal action could be taken.

But with the amount of money involved, it really is time to get a solicitor involved, to review all the correspondence in detail to establish what the prospects of recovery are.

If the "loan" was to a company then there is the possibility of taking legal action against the directors, who have a duty to act in the interests of the company (not the shareholders or a shareholder but the company).
http://www.sykesanderson.com/articles/directors_duties.asp
If the company has assets (eg a house) then it is probably not in the best interests of the company for those assets to be transferred out of the company for less than market value (which may have happened if the friend now owns the properties but there is no money left in the company to pay the OP). But this is a specialist area of law and much more difficult than simple recovery of a loan to an individual.

princeofpounds

Yes, as thenudeone says this is not necessarily a simple matter of a business deal gone wrong. There is no particular reason that the OP should just accept it because there are multiple angles where this money could be recovered or the perpetrators punished... but of widely varying difficulty depending precisely on how this deal was structured.

But how to pursue it depends on all the things I asked questions about and more.

maximumme

My friend had a Limited Company, and the property refurbishment was something he did as a "sideline" slowly building up his own property portfolio. The "sideline" was where I believed my money was going. i.e £30,000 invested and a return 6 months later of £40,000. He gave me his bank details which did not show his limited companys name, it simply said "Commission Account" together with the usual sort code etc. It wasn't until I saw my bank statement that I found out the money had gone into his limited account. I asked why it had gone there, he said "Oh, just in case anything goes wrong", I had no reason to disbelieve or not trust him as I have known him for over 20 years and witnessed him successfully renovating properties.
I contacted a Debt Collecting agency this week who have their own solicitors. The solicitor spoke to him on the phone and my friend told him "The money was invested in a Limited Company that no longer exists, so I am not liable". He still has the property portfolio which includes the 2 properties my money went towards, both still in his personal name and certainly not in the name of any Limited company. I spoke to the solicitor who did not fill me with any confidence, almost shrugging off my claims. I have since sent the solicitor more email documentation, including him agreeing to draw up a contract, agreeing to pay me back ASAP, and saying that I could put a property charge on the 2 properties if I wished to do so, all of this AFTER he sold the limited company.

thenudeone

maximumme wrote: »

my friend told him "The money was invested in a Limited Company that no longer exists, so I am not liable".

Companies don't simply "cease to exist"

Generally, a company cannot be wound up unless it has either paid off all of its liabilities (which the directors have to confirm) OR it's put into administration in which case the administrators should have written to all creditors and arranged to keep them informed, including voting on proposals for restructuring.

What does the companies house website say about the status of the company?

Perhaps you'd be better with a solicitor that YOU have instructed? Debt collectors don't have any special powers and this sort of thing would be quite out of the ordinary for them.

maximumme

thenudeone wrote: »

What does the companies house website say about the status of the company?

The status of the company says "dissolved".

Unfortunately I am unemployed and I cannot afford the £2,000 quoted by a solicitor.

CKhalvashi

thenudeone wrote: »

Companies don't simply "cease to exist"

Generally, a company cannot be wound up unless it has either paid off all of its liabilities (which the directors have to confirm) OR it's put into administration in which case the administrators should have written to all creditors and arranged to keep them informed, including voting on proposals for restructuring.

What does the companies house website say about the status of the company?

Perhaps you'd be better with a solicitor that YOU have instructed? Debt collectors don't have any special powers and this sort of thing would be quite out of the ordinary for them.

Best case in this scenario (our nude friend describes it perfectly), is that he would be looking at a False Accounting charge. If it's going down the lines of misappropriation of funds, the charges could be fraud.

maximumme wrote: »

The status of the company says "dissolved".

Every time we've wound up a company, I've had to sign a legal declaration to state that all known debts have been paid in full.

Did you pay the money to him personally, or to the Ltd, and what paperwork do you have? This is bearing in mind what I have written above.

CK

maximumme

I was led to believe that I was paying it to him personally, but like I said in a previous post, he gave me his bank details which did not show his limited companys name, it simply said "Commission Account" together with the usual sort code etc. It wasn't until I saw my bank statement that I found out the money had gone into his limited account.

Also, he didn't dissolve the limited comany. The person he sold it to did.

xylophone

Then it looks as though you made what was in effect an interest bearing loan to an individual, repayable after six months and the evidence of this is a series of e-mails?

He gave you details of an account into which to pay the money - this was the account of a company of which he was the sole shareholder?

In effect he had either made a loan of your loan to the company or had used the loan to buy more shares in the company?

One presumes the transaction showed in the company accounts.

He then took the money out of the company (how was this shown in the company accounts?) and bought two properties in his own name which he has refurbished?

He then sold the company?

But the fact seems to be that it was he and never the company that owed you money?

Buffett

You have 7 years after the transaction to take legal action ... if your friend was a director of the business then he can be liable if he's done anything naughty. Limited companies don't give directors immunity from the law!