Recovery Money from "Friend"

trigarlaly

deleted posts

poppasmurf_bewdley

Was the money given to the 'friend' or the business? That will make a difference.

trigarlaly

deleted post

poppasmurf_bewdley

If the money was paid into a sole trader's bank account, then he's responsible for the debt.

Unfortunately, there are several imponderables, such as he could say it was a gift or you were buying into a partnership. Is there anything in writing?

If he seeks bankruptcy, then I'm afraid your money is gone.

R_P_W

So you invested in a business that has failed and now want your investment back?

If I bought shares in apple tomorrow and they went bust next week! I would lose my investment.

Is your scenario any different?

trigarlaly

deleted post

poppasmurf_bewdley

trigarlaly wrote: »

Was looking for advice regarding the fact that the equipment was sold and wasnt even offered any recompense.
"Friend" taking funds from sale to apply for bankruptcy.

Unfortunately, if your 'friend' bought the equipment (even with your money), then legally it belonged to him and he could do what he wants with it.

However, if your agreement with him was to loan him the money to buy the equipment, and you have it in writing from him that this was the case, then you would have a comeback and a lien on the equipment.

But am I right in saying you have nothing in writing?

trigarlaly

deleted post

nomoneytoday

If there's no money there, then there's nothing to be had.
Was the (ex) business owner fraudulent in any way?

trigarlaly

deleted post

Tixy

The person now running a new business in the premises owes no debt to your partner.

If the 'friend' is considering bankruptcy and taking advice on bankruptcy he will be advised not to pay off any creditor in favour of others. Any surplus money he has should first be used to pay his bankruptcy fees, and if there is any further surplus funds after that this will be dealt with by the official receiver, who should ultimately distribute the funds equally between creditors.

If he owes your partner money then your partner should ensure he is listed as a creditor in the bankruptcy so that he will get his pro-rata share of any funds (be that initial surplus money or any money 'friend' pays in to the bankruptcy over the next 3years - assuming he ends up with an IPA).

If the bankruptcy turns out to be just a threat and he doesn't actually go bankrupt then your partner could always consider commencing court action against him (that is assuming that the loan agreement he has clearly states the intention was for the loan to be repaid by 'friend' regardless of the success or failure of the business).