DCC 14/2008

This case involved whether a director could use their company's guarantee to cover a personal debt. Even if the action was constitutionally allowed by the company, it should not be allowed if it was not in the best interests of the company.

Background Facts

A Claimant brought forward proceedings against a company and its director, seeking compensation for debts that the director had incurred for the company by virtue of a debt agreement.

The director, in his personal capacity, had entered into the agreement in order to schedule his own personal debts.

The director, in his professional capacity, then entered into the same agreement guaranteeing that his company would be responsible for safeguarding his debts, if he failed in his personal capacity to cover them.

Having failed to cover them, the Claimant now sought to retrieve the amounts through the director's company, under to the latter's guarantee.

Proceedings

Court of First Instance - Decision No 792 of 2007