Our Case Studies

Father With Dementia Personally Guaranteed Company Debt For Son/Daughter


In the mid-2000s T was sourcing new funding from a new bank, who said they could do better than the old bank. After T moved the company’s banking to the new bank, the new bank changed their mind as to how they would provide their funding and insisted that T’s father provide a personal guarantee for £40k.

T’s father, who had no involvement in the business drove a round trip of 240 miles for the sole purpose of signing the personal guarantee and was simply provided with just this document to sign, at the bank’s premises and without further information.

The company failed within 2 years and the bank were pursuing T’s father on the basis of the personal guarantee he signed.


As a non-involved person the bank had an obligation to insist that T’s father obtained independent legal advice. The fact that the bank had not acted properly and T’s father was suffering from progressive dementia, a settlement was agreed on the £40k alleged claim for £11k.

It could be argued that no money was due at all, but the settlement was T’s family’s decision to take a pragmatic view and get on with their lives without having the threat of legal action over their heads.