Director' Loan to a Private Limitied Liabaility Company

Director' Loan to a Private Limitied Liabaility...

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I am a shareholder in a private limited company; myself and two others each own one third of the issued share capital

I was  also a director of that same company until recently when  the to other two ganged up on me and aggressed me as a minority

They did the following to me :-

 1) diluted my 33% shareholding down to 7% through a rights issue I did not exercise as they would not tell me what the cash proceeds from the new issued equity were going to be used for

2) removed me a company director

I have been beaten up quite badly as a minority of one against two

In addition to the UK 100,000 cash I paid in for my one third of the issued equity at launch, I also made a loan to the company of UK 10,000

Loan terms verbalized were  ; interest-free and repayable on demand and then these loan terms were detailed explicitly in the filed Annual Report

Now that  have been brutalized and marginalized,  I at least want my 10,000 loan repaid to me

I have formally submitted that request to the company secretary who passed my request to one of the two aggressing directors who has responded in an email saying :-

Your loan is not going to be repaid and in fact we intend to convert all such loans to equity forthwith

I am at a loss !

What can I do to get tis resolved in my favor?

I want my UK 10,000 loan repaid to me immediately; I am assuming my UK 100,000 of cash paid in for equity is locked up in the company forever and  day

Do they have the right to block that loan repayment?

Do they have a right to convert my shareholder / director' loan into new shareholder equity?

I do not want more equity in a small company where I am being bullied every day and have zero effective say or vote

Responses will be highly appreciated

Replies (3)

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By johngroganjga
31st Dec 2014 08:19

Wrong website
These are all legal questions but this is a website for accountants.

You need legal advice.

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RLI
By lionofludesch
31st Dec 2014 08:29

Agree

The contributors on here are not likely to have the right expertise to help you.

You need a lawyer.

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By johngroganjga
31st Dec 2014 08:44

However, although I am no lawyer, I think I am on safe ground in saying that the company can't convert your loan into shares without your agreement. So the legal advice you need in the first instance is on how to mount a simple debt recovery action. If the company is solvent that should not be too difficult.

Are you in the UK? I ask because you use American spelling and seem to have a keyboard that lacks the £ symbol. If you are not in the UK you face an additional difficulty in accessing the legal advice you need.

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