Fraudulent,thieving ex business partner......

yonny1

Basically, DH set up a company last year with his mate (whom he'd been best man for!!) they were both directors of a limited liability company.
A year later it comes to light that the partner has been embezzeling funds to the tune of almost £200 grand and the company has had to be wound down, at DH's expense!
Most of this money is owed to the bank where they had a BACS facility, the partner was raising fraudulent invoices and taking the money
Both partners had to sign a form with the bank before getting the facility and now my husband is also being held liable for money he had nothing to do with.
We do have a solicitor working on it but is there anything else i can do?
My DH is suicidal!
I have the proof that it was the ex partner who took money out of the ATM
Can the bank be castigated for allowing that much money through without checking first?
I need some help please before we both go and jump off a cliff somewhere!

looneyleo

This is terrible. So sorry that your business venutre has ended this way. I'm afriad I don't have any structured advice other than to say this can and will be sorted one way or another and whatever happens, you still have each other and you must gain strength from that. As a Director of a LTD company myself (with 3 other equal partners) I have to say that the banks are very strict on the liability with this sort of thing and will hold anyone of the directors responsible in order to get there money back. Good luck with it all and try to keep it all in perspective. this is ONE aspect of your life that is bad, not all of your life. Focus on the positives and the rest will follow through eventually.

Bean_Counter

Don't do anything hasty.

Did husband and business partner provide personal guarantees to the bank before getting their facilities? The bank would not have lent money without either a significant csah investment from husband and (former I presume) mate and probably without personal guarantees too?

I doubt any blame can be put at the banks door as they would have advanced money based on their standard lending policy. If husband doesn't spot the mistake, there is little chance the bank will based on only receiving periodic management accounts.

In terms of directors responsibilities and duties, they have a duty to enact the day to day business of the company in the best interests of the company with reasonable care and skill. If you google "directors duties" and / or "directors responsibilities" you will come up with countless links that will explain more than I could ever cover here.

By and large, it may well come down to whether your husband should have spotted that his mate was embezzelling before it got to the point that the company was shut down. There is an expectation, depending on respective skills and knowledge, that he should have been 'reasonably' aware of it. This does NOT imply that he should have been a forensic accountant and should have spotted it, but it does mean that once the company started to fail and the money began to run out that pertinent questions should have been asked and investigations made.

In the best case scenario, if it can be proved that your husband acted reasonably, then he can expect to loose whatever cash for shares he put into the company and any personal guarantees to the bank. Remember this is a limited liability company for a reason. I suspect that the bank and other creditors such as HMRC will come looking for the money, and given the information here, the mate seems clearly guilty of fraud and likely to be criminally pursued by the creditors.

What to do next? I would seeking legal advice at this point in time to make sure that husband is not open to legal action. Also start to pull together if you can evidence that your husband acted properly and it was all down to the mate. Such evidence might be baord meeting minutes / emails etc where husband queries lack of cash / poor performance, only to be fobbed off with a reason such as money was being invested in contract xxx and the profit would be realised in six months time.

If you want to give me some more details I will try and come up with something specific. I'm not a lawyer, but as a CA and finance director, I get involved in these areas from time to time! Also let me know if you can't find anything on google as referred to above.

Let me know if you need more help.

pinkshoes

So i'm presuming your husband and his best mate are no longer mates?!?! Does he know where his "mate" is? (i.e. has he moved abroad)

Is there no chance you can get the police involved and have the "mate" charged with theft?

MortgageMamma

I fully sympathise but as a director of a ltd company myself I am amazed this guy managed to steal so much money without your hubby knowing!

yonny1

Believe me Mortgage mama I couldnt beleive it either but seemingly he (the 'mate!') had access to a BACS account with RBS and once BACS is agreed then seemingly the bank dont ask questions even when fake invoices are raised as in this case!!!

Pinkshoes, we wanted the police involved but our solicitor is unhappy about this as the bloke would go to jail (fab I think!) but no money would be recovered from him and the RBS would just come after my hubby!

Beancounter, what a lovely person you are with all that advice!
The personal guarantees to RBS for the BACS facility were 10 grand each from both partners UNLESS fraudulent activity occurred, which it has done!
There are no emails in existance re the querying of cash missing as all the software was on the partners pc and although we have proof of fake invoices and money drawn down against them and put into his account we have nothing else.
We have bank statements showing large withdrawals from the ATM by this bloke and proof has come to light that he has done this before so i could easily find people to stand up in court against him.
Apart from that, im thinking of going to the papers, surely the bank dont want the publicity or would that backfire??

Thank you all for so much advice, very much appreciated and any more gladly accepted!!!
Cheers x

Pobby

Sorry to hear your news.Are the police involved?

Bean_Counter

yonny1 wrote: »

Believe me Mortgage mama I couldnt beleive it either but seemingly he (the 'mate!') had access to a BACS account with RBS and once BACS is agreed then seemingly the bank dont ask questions even when fake invoices are raised as in this case!!!

Pinkshoes, we wanted the police involved but our solicitor is unhappy about this as the bloke would go to jail (fab I think!) but no money would be recovered from him and the RBS would just come after my hubby!

Beancounter, what a lovely person you are with all that advice!
The personal guarantees to RBS for the BACS facility were 10 grand each from both partners UNLESS fraudulent activity occurred, which it has done!
There are no emails in existance re the querying of cash missing as all the software was on the partners pc and although we have proof of fake invoices and money drawn down against them and put into his account we have nothing else.
We have bank statements showing large withdrawals from the ATM by this bloke and proof has come to light that he has done this before so i could easily find people to stand up in court against him.
Apart from that, im thinking of going to the papers, surely the bank dont want the publicity or would that backfire??

Thank you all for so much advice, very much appreciated and any more gladly accepted!!!
Cheers x

Sorry, but it is hard to know what to definitively suggest. In your position, I would consider changing lawyers. No-one likes paying lawyers (especially accountants), but I think the cost is better than what the alternative might be. At the moment you need to look after number one, whether it be jail for the 'mate' or not.

Personally I would NOT go to the papers at the moment. It might not seem like it, but I do not think that the bank has done anything legally wrong. I do not see that there is anything to gain.

At the moment you want to be looking after number one. (Caveat: no experience of this, just seems like best way forward. However as a finance director I sometimes skirt the edges of these types of things!!!)