Call us today to speak to our Business Debt Experts: 0333 305 4331

Available 24/7. Request a call back.

Case Studies

Resolving A Disputed Overdrawn Directors Loan Account

Date

21 May 2023

Introduction

Our client’s company was placed into liquidation. He believed that in this case, he would have minimal personal liability however, the liquidator began pursuing him for an overdrawn director’s loan account.

The liquidator overseeing the case had pursued every transaction made from the account in the two years preceding liquidation. At this point, our client was facing a significant challenge in the form of an Overdrawn Directors Loan Account claim amounting to £154,000.

Why The Client Came To Us

As well as the threat of legal action or even bankruptcy over the £154,000 claim, our client was in the process of selling his property. This had an equity value of approximately £700,000. The liquidator’s threat of a freezing order posed a significant risk to the property sale, potentially disrupting the entire chain and resulting in substantial financial losses.

The looming prospect of losing the property sale and facing bankruptcy had taken a toll on our client and his wife, causing significant mental and emotional distress. It was at this point that he recognised he needed to appoint insolvency experts.

What We Did

Attacking the Fraudulent Claim: Our initial focus was to challenge the validity of the liquidator’s claim, using financial expertise to scrutinize incomplete accounting records. Using thorough analysis, we were able to identify discrepancies and inaccuracies that undermined the claim’s credibility.

Providing Financial Evidence: We gathered and presented compelling financial evidence to support our client’s case. Our thorough investigation demonstrated that the actual amount owed on the Overdrawn Directors Loan Account was significantly lower than the liquidator’s claim, totalling around £72,000.

Demonstrating the Best Interest of All Parties: To resolve the case in the most favourable manner, we developed a strong argument showcasing the benefits of allowing the property sale to proceed. We got the liquidator to agree to a reduced settlement paid from the proceeds of the sale. This ensured our client avoided bankruptcy and could preserve a substantial portion of their equity.

Outcome

Through our diligent efforts and negotiation skills, we successfully achieved a settlement of £53,500. This significantly reduced amount not only protected our client from bankruptcy but also allowed the property sale to proceed smoothly. As a result, our client was able to access the funds from the sale and utilize them to purchase a new property, enabling them to move forward with their lives.

This case required the use of our experience and knowledge of liquidation, director’s loans and a huge amount of accountancy work to disprove the claim made against our client. This was extremely time sensitive due to the threat of bankruptcy and the potential of a freezing order. Luckily, our client appointed us at the right time and we were able to resolve this issue.

Leah O’Kane

Associate Director

What’s your next step?

Get in touch with us at Bell & Company today to see how we can help

Practical help when you really need it.

The team at Bell & Company were amazing. They assumed control and steered us through a difficult time with real professionalism. Would highly recommend.

Practical help when you really need it.

The team at Bell & Company were amazing. They assumed control and steered us through a difficult time with real professionalism. Would highly recommend.

J&J Roofing and Building - GB

Get a Free Consultation Today

Worried about debt? We know that sometimes taking the first step can be the most difficult part.

Our experienced experts are always available to discuss your situation and provide options.

Contact us today for a free case review with one of our specialists.

"*" indicates required fields

Drop files here or
Max. file size: 100 MB.
    This field is for validation purposes and should be left unchanged.