Money and Family Feuds

Someone I know is a little worried about his dad. His dad is a lovely person – thoroughly generous and has the kindest heart I know. He is compassionate as well as passionate in the things he does, which is mainly helping others.

Many years ago his dad, whom I will call Uncle C, decided to leave a business he shared with his 2 siblings. A sister decided to leave the business as she did not feel comfortable with the values or business practices of the brother who was running the place. She was bought out, leaving Uncle C and his brother as the remainder shareholders and directors.

Soon after the sister’s departure Uncle C also decided not to remain in the business so he too wanted out.His brother however asked that he remained as he needed Uncle C to remain as director and guarantor of the company’s borrowings. Ever the soft hearted generous soul, Uncle C agreed.

The problem however, as the departed sister astutely observed and resolutely acted on, was that Uncle C’s brother had a business practice which includes not paying creditors, or paying them just enough to ward off serious trouble. He would live with debts (which are not your usual trading debts but debts long overdue and owing) hanging and legal suits all around him so long as the company survives. In the meantime of course, Uncle C’s brother did not suffer any abatement of a luxurious lifestyle. Overseas trips continue, high net worth clientele is established and his children attended full boarding schools overseas. Uncle C always had money but preferred to keep it as long as the creditors weren’t going to pull the plug definitively.

And so it came about that at least one of the creditor banks commenced legal proceedings against Uncle C, the company and his brother. Uncle C was a little concerned but the brother said not to worry, he would negotiate with the bank. It turned out he paid the bank a fraction of what was owed and knowing banks and their solicitors that would never be enough to withdraw action. The proceedings would continue albeit the triggers to the big artilleries would be spared.

As the debt dragged on however, the bank has proceeded to enter judgments against Uncle C, the company and his brother. Uncle C remains the soft hearted generous man and being at an age where he no longer runs any commercial interests actively (his children do that for him these days) he didn’t really care about the judgment, at least not enough to warrant a firm talking to with his brother. He telephoned the brother who provided him with the usual “we will talk to the bank” response. In the meantime the judgment sits there with the prospect of bankruptcy proceedings hanging like the proverbial sword of Damocles.

Naturally my friend is concerned and has asked if something could be done. As a start I have drafted an email with a tone of a firm wagging of a finger. It is probably enough to introduce tension into the family relationships but I guess if you don’t respect your brother enough to make sure no judgments are entered against him on your account, you deserve the firmest finger at the very least. My friend too, like his father, tends to be soft. Yours truly would have launched an ICBM a long time ago.