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Help - No money. Wife exploiting superior funding

  • Trebor1234
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06 May 19 #507441 by Trebor1234
Topic started by Trebor1234
My wife and I are getting divorced. We run a family company in which she has 60% equity and I have 40%. It was incorporated in 11.14 and started trading 2.15. We are a Ltd but effectively a “Quasi Partnership”. We are both directors.

At the beginning of 2016 my wife took on a member of staff and from that point progressively passed all of the things I did to this new staff member whilst taking over more herself as well, to the extent that I was marginalised and had no role except for making payments through the company bank account which I had sole authority over. There was no consultation over a change of my role or change of responsibilities.

We have model articles and there are no director’s service contracts or shareholder’s agreement (we didn’t think we needed them – naive of me I know, now). I have proposed drafts of these documents subsequently, but my wife has refused to attend any board meetings at all to discuss them since even before divorce proceedings commenced in March 2017.

As I have been starved of information regarding the company (I have requested multiple times that I be given key documents so I could legally carry out my responsibilities as a director) I have been concerned for some time that we could be trading illegally. One example: at Christmas 2016 we had an outstanding invoice, very little cash in the bank, but the payroll was due. My wife instructed me that I should make the payroll and that the invoice could wait. So, we effectively traded at the expense of a minor creditor which I understand now is illegal.

Her reckless approach to finances has ensured that I have wanted to keep a tight grip on cash flow and payments now. We had our First Appointments meeting last September and a Directions meeting in February. My wife argued that she should be given authority to make payments (she already had access to view the accounts). I refused on the basis that I wasn’t being given the information I required to do due diligence on any payments. This was discussed in court.

The summary of what was decided by the court is this: "At the hearing (wife) requested to be added as a signatory to the business accounts. Her position was that (husband) was not making timely payments and (husband’s) position was that (he was) merely undertaking due diligence by requesting relevant documents before payment could be made.

As an agreement could not be reached the position remains the same that (husband is) the only signatory".

On Thursday of last week my wife, dodged another board meeting I had called to discuss this, and went to our bank and tried to get control of the bank account as a sole signatory and explained the need for that as being her ongoing acrimonious divorce proceedings with me and my level of directors loan which has taken money out of the company bank account (we both have substantial loans – mine is approx. £30,000. Hers is approximately £15,000). The bank promptly initiated their “divorcing couple running a business together” process which requires us to jointly sign all disbursements and to jointly attend a branch to sort things out. Presumably this is to protect the bank from being accused of helping one party siphon off monies from a joint asset.

My questions are this:

1. has my wife broken any laws by approaching the bank behind my back and effectively going against the wishes of the court which was to maintain the status quo.

2. If the company does go bankrupt then what are the implications for me as a director that has a large directors loan which is taking cash from the business (I have nothing else to live on – my wife has a litigation loan and has borrowed over £100,000 from her parents and is trying to crush me with superior funding – I have had to act as Litigant in Person) which could pay creditors as well as the payroll which we have also defaulted on at the end of April for the same reasons as a previously.

3. Under article 6 of the European Convention on Human Rights I’m entitled to a fair trial. But now three solicitors have stopped working with me because I can’t pay their invoices and so am seriously disadvantaged.

What are my options? I’ve applied twice for a litigation loan and been turned down. I’ve already borrowed money from friends and family. And my credit score is now dreadful.I have run out of options and ways to fund my litigation. Can I apply for an order for my wife to pay my costs? We have a Private FDR on 3 July and no counsel to help me.

4. I have considered personal bankruptcy but want to start another company after the divorce as I have been told I will not be allowed to continue in the family company I set up as my wife is main revenue generator. I’m about to be kicked out of my own company at a massively discounted share price because my wife manipulated the forecast growth figures for the next three years in input to the joint expert valuers which drove the value down to peanuts.

I do not have the money to challenge the joint expert’s opinion.

In fact, my last question is this. If I do not have the money to pay jointly appointed experts for their revised reports (we also have revised reports being generated for CGT) , which has been ordered by court, then what am I to do in terms of complying with court orders?

Any help anyone can give me on any part of this complex mess would be greatly appreciated. Thank you.

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