Bob, Whilst I was looking back to copy and paste the above in reply to you, I noticed you had amended one of your previous posts and I had not seen it, this is what you added...
I've took your advise, thank you, and look this up on 't'internet' as you suggested but decided to go to the main man for the definitive explanation, being the UK Governments, Insolvency Service.
The definition is clear and simple...
Details
A director’s loan is when you take money from your company that is not:
- a salary, dividend or expense repayment
- money you’ve previously paid into or loaned the company
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The key phrase here being...
...when you take money FROM your company...
NOT as you state...
...or settles a company liability FROM other PERSONAL RESOURCES...
So did ED put the money into BL first, then KA withdrew it (as a DL) in order to settle BM, or not?
And I guess the other side of the equation is did ED really put £7.5m in to BL in Sept 2018, for that amount and secure it against assets?
To my logic then the time line must have been something like this
- ED loans BL £7.5m secured on assets,
- KA takes it out as DL
- KA pays off BM
- KA then puts in an additional £7.5m to BL in order to secure it on assets
If all this had happened the result would be ED with a legitimate claim for the £7.5m additional secured creditor amount and KA having a DL debit of £7.5m a claim for £7.5m secured creditor amount and £7.5m less in his personal bank account (which one assumes would be the money he loaned from ED - but that of course can't have been the same £7.5m loaned to BL as that had been used to pay off BM).
In this case both ED and KA's claims would stand for the additional £7.5m security they claimed, ED would also be owed £7.5m from KA for the loan to him.
KA would have a £7.5m debit as a DL, a £7.5m secured creditor amount and a personal debt of £7.5m to ED.
This I believe to be your position on all of this?
If so then
- ED would have paid out £15m and be a creditor to both BL and KA
- KA would be a debtor of £7.5m to BL's Directors Loan account, a secured creditor for £7.5m (which would balance off his DL) and a debtor of £7.5m to ED
- BM would have been settled.
Unless KA put £15m into the pot in reality, then all this simply didn't happen - it was simply a paper trail.
That's my position on all this - and I suggest it is the Administrators too and why he threw it all out.
Ten Bobsworth wrote:P.S. If you would like to know more about Directors Loan Accounts (which this was) there's loads of advice on t'internet. The DLA will be credited when a director pays money into the company or settles a company liability from other personal resources. In this case there must have been both but the Administrators chose to ignore the c.£5million settlement of the Blumarble debt from money personally borrowed by KA from Eddie Davies.
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I don't know these people even if it sounds like they might know me:
'Bob, being the wise and savvy director that he is, will monitor his DLA monthly to make sure that he understands how much in debit or credit he might be'.
Last edited by Ten Bobsworth on Tue Sep 19, 2023 11:27 am; edited 3 times in total
I've took your advise, thank you, and look this up on 't'internet' as you suggested but decided to go to the main man for the definitive explanation, being the UK Governments, Insolvency Service.
The definition is clear and simple...
Details
A director’s loan is when you take money from your company that is not:
- a salary, dividend or expense repayment
- money you’ve previously paid into or loaned the company
[You must be registered and logged in to see this link.]
The key phrase here being...
...when you take money FROM your company...
NOT as you state...
...or settles a company liability FROM other PERSONAL RESOURCES...
So did ED put the money into BL first, then KA withdrew it (as a DL) in order to settle BM, or not?
And I guess the other side of the equation is did ED really put £7.5m in to BL in Sept 2018, for that amount and secure it against assets?
To my logic then the time line must have been something like this
- ED loans BL £7.5m secured on assets,
- KA takes it out as DL
- KA pays off BM
- KA then puts in an additional £7.5m to BL in order to secure it on assets
If all this had happened the result would be ED with a legitimate claim for the £7.5m additional secured creditor amount and KA having a DL debit of £7.5m a claim for £7.5m secured creditor amount and £7.5m less in his personal bank account (which one assumes would be the money he loaned from ED - but that of course can't have been the same £7.5m loaned to BL as that had been used to pay off BM).
In this case both ED and KA's claims would stand for the additional £7.5m security they claimed, ED would also be owed £7.5m from KA for the loan to him.
KA would have a £7.5m debit as a DL, a £7.5m secured creditor amount and a personal debt of £7.5m to ED.
This I believe to be your position on all of this?
If so then
- ED would have paid out £15m and be a creditor to both BL and KA
- KA would be a debtor of £7.5m to BL's Directors Loan account, a secured creditor for £7.5m (which would balance off his DL) and a debtor of £7.5m to ED
- BM would have been settled.
Unless KA put £15m into the pot in reality, then all this simply didn't happen - it was simply a paper trail.
That's my position on all this - and I suggest it is the Administrators too and why he threw it all out.