My company has been struggling to stay above water in this rough economic climate, and was eventually put into business rescue. We owe one of our main suppliers a substantial amount of money. The supplier was on the verge of starting a law suit against us when the business rescue happened. Now he is demanding that I pay the debt personally, and is threatening to sue me instead, if I don’t pay up. I signed a personal suretyship when my company applied for the credit. Is this suretyship still valid?
The short answer is yes. Because of the business rescue the supplier, as a creditor, is prevented from issuing a summons against the company. However, business rescue doesn’t impact on suretyships that were signed to secure the company’s borrowings and credit facilities. This means that the supplier could indeed take legal action against you on the basis of the suretyship that you signed. Our recommendation is that you consult with an attorney who can read the suretyship and advise you.