my uncle was director of a company,he along with other directors is said to have issued a continous deed of guarantee during 1994,my uncle resigned from director soon after,he passed away in dec 2002,now in 2013 the bank says they are going to take legal action upon my uncle estates,my cousins had no knowledge about this till now,can bank take legal action,how can my cousins defend themselves.
2 Answers from Attorneys
The resignation from being a director will be a good defense. You have to check with the office of Registrar of Companies about proof of Form 32 submitted by him. Be as that it may, limitation is another ground. He having died in 2002, action cannot be brought against legal heirs now in 2013. thirdly, it is first the principal borrowers have to be followed by the bank, the guarantor comes later.
In addition, one needs to look into the documents, claim etc to form a comprehensive opinion.
Dear Sir / Madam,
In the case of many private limited Companies, all the Directors are family members and are related to each other. Should that be the case, the bank is totally justified in recovery of the entire outstanding loan / credit facilities extended from the estate of the guarantors. You should refer back to the loan documents to check for inclusion of the clause whether legal heirs of guarantors are also included therein. If there is no mention, you should defend yourself on those lines.
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