Can my brother be saved from debt trap?

The Question:

My brother, 63, a serial entrepreneur, formed a company about three years ago with two co-directors to lease pubs from a brewery.

About 12 months ago, due to stress and disagreement with his co-directors, he left the company but remained guarantor for the payments to the brewery, which has a lien on his heavily mortgaged family home. One of his sons is a guarantor of the mortgage. My brother rents out this property and lives with his 69-year-old wife in a small rented bungalow. The difference between the two rents is about £300 a month and they make ends meet from commission on sales for a number of companies and his wife’s occasional part-time work.

It is likely that the debt to the brewery can be paid off in about two years, but the thought that it might not be is putting my brother and his wife under increasing financial and mental stress. His ex-partners have recently missed a couple of payments to the brewery.

Bankruptcy would take what little equity is left in the former family home, along with other minimal assets, and be a black mark against my brother’s name. Additionally, any small financial assistance the family might provide could be ensnared in any bankruptcy. What can be done to get my brother out of this mess?

My Response:

The first question I would ask is why, having left the company, has your brother remained a guarantor for the company’s obligations? Also, what is his current role? Does he retain equity ownership, with shareholder rights, and what are the terms of the lien?

Depending on the answers to the above, he should have a discussion with the remaining directors and shareholders, and the bank, about removing the guarantee altogether or transferring it to the remaining stakeholders.

If he remains a shareholder, it may be worth considering trading shares in exchange for removal of the guarantee. Alternatively, a repayment plan could be worked out where the company agrees to pay down the brewery debt and to indemnify the client personally for any default.

If the aim is to alleviate his brother’s stress and misery, another possible solution may be to sell the house, pay off the outstanding mortgage and remove the lien, although your brother may not want to go down this route and ultimately there may be little equity in the property.

As your brother’s wife is 69, she should be claiming a pension. If he and his wife have no additional income, she will be able to claim the “couple” rate of pension credit of £217.90 per week, although this is income-related and any income including pension and commissions will be deducted. They would also be able to retain savings of up to £10,000. There may also be an argument for the couple to receive housing benefit.

About the Author:

Jonathan Abrams is a Senior Associate Solicitor, with experience in advising both public and private companies, particularly start-ups, SMEs and investors. Jonathan’s practice focuses on corporate and business transactions, with a particular focus on the Media and Energy sectors. Jonathan is a qualified US attorney-at-law and continues to counsel clients in both the UK and the US.  

If you require assistance or have any questions about Starting a business or investing in early stage businesses or SMEs, please don’t hesitate to contact our Corporate Team on 020 7979 2066 or email the author, Jonathan Abrams (jabrams@gadllp.co.uk), Senior Associate Solicitor.

The Patient’s Association published their report “meaningful and comparable information? -  Tissue viability, nursing services and pressure ulcers” in September 2010.

The important conclusions to note were as follows:-

• Approximately 412,000.00 individuals will develop a new pressure sores annually in the UK

• Under Freedom of Information Act requests it was discovered that staffing levels at Hospital Trusts were highly variable appearing to lack any significant relationship between patient Trust population or Trust activity level.

• Pressure sores cost the NHS between 1.422.1 billion a year. 

• Only 50% of Trusts and 66% of PCTs can provide any estimates of waiting times for a referral to a Tissue Viability Nurse Service. 

• When compared with infection the monitoring of pressure sore incidents was much poorer.

If you or a family member have suffered a pressure sore it is our opinion that the cause should be investigated to assess whether reasonable measures were taken to inhibit the development of what is an increasingly common but generally preventable injury.

If you or a family member/friend have suffered a pressure sore whilst under the care of a health professional whether that be in hospital or a care home you or they may be entitled to compensation.  Here at Gregory Abrams Davidson LLP we have a specialist team dealing with pressure sore cases.  Please contact us for a free initial consultation on 0151 236 5000 or 02082 09 0166 and ask to speak to Richard Malloy.  Alternatively, you can e-mail us at info@gadllp.co.uk or fill out our online contact form and we will contact you directly. 

In 2007 Ayesha Clarkson published an article in Wounds UK asking the question, are pressure ulcers an act of nursing negligence? 

The article discussed whether pressure sores which formed whilst a patient was resident in a nursing home could be considered an act of nursing negligence. The article considered whether pressure sores are preventable and whether nurses can be held to account for their formation.

She relied on research arguing that pressure sores were 95% preventable. 

This therefore led her to the question of whether nurses be considered neglectful or abusive for allowing pressure sores to develop?

It was noted that the Nursing and Midwifery Counsel protects the public by ensuring that nurses and midwives provide high standards of care for their patients and clients. 

She identified a key factor as being a nurse’s duty to identify the risk of pressure sore development and suggested that this is part of basic nursing knowledge. 

She noted that “prevention consists of a risk assessment and ensuring that the patient is repositioned according to an individualized schedule.  Two hours is the accepted maximum interval that tissue can tolerate pressure without damage.  Prolonged immobilization, sensory deficit, circulatory disturbances and poor nutrition have been identified as important risk factors”.

She highlighted that nurses have increasingly been held to account for pressure sore development and many cases that have gone to Court have highlighted poor standards of care relating to pressure sore prevention.

If you or a family member have suffered a pressure sore it is our opinion that the cause should be investigated to assess whether reasonable measures were taken to inhibit the development of what is an increasingly common but generally preventable injury.

If you or a family member/friend have suffered a pressure sore whilst under the care of a health professional whether that be in hospital or a care home you or they may be entitled to compensation.  Here at Gregory Abrams Davidson LLP we have a specialist team dealing with pressure sore cases.  Please contact us for a free initial consultation on 0151 236 5000 or 02082 09 0166 and ask to speak to Richard Malloy.  Alternatively, you can e-mail us at info@gadllp.co.uk or fill out our online contact form and we will contact you directly. 

Here at Gregory Abrams Davidson Solicitors we have a specialist team dealing with pressure sores also commonly referred to as pressure ulcers and bed sores. 

A pressure sore is damage that occurs on the skin and underlying tissue.

Pressure sores are a graded injury:-

• Grade 1; Discoloration of the skin, oedema induration or hardness may be used as indicators, particularly on individuals with darker skin; in whom it may appear blue or purple.

• Grade 2; partial thickness skin loss involving epidermis, dermis or both. The ulcer is superficial and presents clinically as an abrasion or blister.  Surrounding skin may be red or purple.

• Grade 3; full thickness skin loss involving damage to or necrosis of  tissue that may extend down to, but not through the tissue surrounding the muscle.

• Grade 4; extensive destruction, tissue necrosis, or damage to muscle, bone or supporting structures with or without full thickness skin loss.  Extremely difficult to heal and predispose to fatal infection.

If you or a family member have suffered a pressure sore it is our opinion that the cause should be investigated to assess whether reasonable measures were taken to inhibit the development of what is an increasingly common but generally preventable injury.

If you or a family member/friend have suffered a pressure sore whilst under the care of a health professional whether that be in hospital or a care home you or they may be entitled to compensation.  Here at Gregory Abrams Davidson LLP we have a specialist team dealing with pressure sore cases.  Please contact us for a free initial consultation on 0151 236 5000 or 02082 09 0166 and ask to speak to Richard Malloy.  Alternatively, you can e-mail us at info@gadllp.co.uk or fill out our online contact form and we will contact you directly. 

*Nice Guideline 29 – issued September 2005

A pressure ulcer is damage that occurs on the skin and underlying tissue.

Pressure ulcers are caused by three main factors:-

• Pressure; the weight of the body pressing down on the skin.

•Shear; the layers of the skin are forced to slide over one another or over deeper tissues, for example when you slide down or are pulled up a bed or chair or when you are transferring to and from your wheelchair.

•Friction; rubbing of the skin.

The first sign a pressure ulcer may be forming is usually discolored skin, which may get progressively worse and eventually lead to an open wound. The most common places for pressure ulcers to occur are over bony prominences (bones close to the skin) like the bottom, heel, hip, elbow, ankle, shoulder, back and the back of the head.

If you or a family member have suffered a pressure sore it is our opinion that the cause should be investigated to assess whether reasonable measures were taken to inhibit the development of what is an increasingly common but generally preventable injury.

If you or a family member/friend have suffered a pressure sore whilst under the care of a health professional whether that be in hospital or a care home you or they may be entitled to compensation. Here at Gregory Abrams Davidson LLP we have a specialist team dealing with pressure sore cases. Please contact us for a free initial consultation on 0151 236 5000 or 02082 09 0166 and ask to speak to Richard Malloy. Alternatively, you can e-mail us at info@gadllp.co.uk or fill out our online contact form and we will contact you directly.

*Nice Guideline 29 – issued September 2005

Mr & Mrs Riding had been married for 7 years until separation. They had a 9 year old child between them, and there was a 14 year old child to the wife. The Husband was a successful Chartered Surveyor, and managing partner of a large firm.  He was 57, and the wife 44.

There were two distinct classes of assets: those held or originating from assets held by the husband prior to the marriage and those that were the product of the marriage.  The precise values of some of the assets were not ascertainable from the published judgment, but they totalled around £4.5m.  Around 2.4m of that was tied up in a near 30% shareholding the husband had in a property development company, which was expected to be realised when the company is eventually sold as a whole.

The judge decided to share those assets that had been built up during the course of the marriage.  This would leave the wife with a little over £1.2m. This would meet her needs; the judge assessed these as £800,000 for a home and £450,000 for legal fees.  On top of this, the judge felt that she would be entitled to spousal maintenance of £55,000.p.a.  However, the judge was able to capitalise this by giving her savings in lieu.  Taking into account the fact that the marriage was only 7 years (and therefore “the wife’s entitlement to receive a very high income order long after separation [was] limited”), and the fact that the husband would want to retire some time after he is 60, the wife would receive an additional £650,000. This would give her the ability, by carefully managing her money, to remain in her home (which was far too big and valuable for her needs), leaving her with the ability to sell it and realise capital it some point in the future if necessary.

This was a case in which the equal division of capital built up during the marriage helpfully gave the wife enough to meet her reasonable capital needs. There was enough elsewhere to enable the husband to pay the capitalised maintenance.  He would get to keep all of his income, save for £15,000 p.a. that would have to be paid as child maintenance.

Given this, it will be perplexing for many how the wife’s fees got to be so large.  The judge however made no criticism of this, instead explaining that the husband had not helped by encouraging justified suspicion of the wife.  The judge agreed that the process adopted by the wife’s legal advisors in obtaining disclosure was “at times…like pulling teeth”. It is certain that had the parties adopted a Collaborative approach to reach their settlement, costs would have been tiny compared to the eventual costs.

This judgment is a classic example of how cases such as these are determined. It is interesting to note, however, that even before the judgment was handed down, the husband had changed his job and was employed elsewhere.  The judge appears to have not been told about this.

Here at Gregory Abrams Davidson Solicitors we have a specialist team dealing with pressure sores also commonly referred to as pressure ulcers and bed sores.

Pressure sores can develop very quickly in some people if the person is unable to move for even a very short time; sometimes within an hour.  Without care, pressure sores can be very serious.  They can damage not just the skin, but also deeper layers under the skin.  Pressure sores may cause pain or mean a longer stay in hospital.  Severe pressure sores can destroy the muscle or bone underneath the skin, so they can take a very long time to heal.  In extreme cases, pressures sores can become life threatening, as they can become infected, and sometimes cause blood poisoning or bone infections.

Health care professionals are expected to utilize a variety of techniques in order to prevent the development of pressure sores including:-

• Keeping moving; one of the best ways of preventing a pressure sore is to reduce or relieve pressure areas that are vulnerable and this is best done by moving around and changing position as much as possible.  If you have or are at risk developing a pressure sore the health care professional should work with the patient to find ways to assist movement and change of position.  Movement should be monitored and the health care professional should consider whether sitting time should be restricted to less than 2 hours.

• Mattresses and cushions; there are many different types of mattresses and cushion that can help reduce the pressure on bony parts of the body and help prevent pressure ulcers.  If a patient is at risk or has a grade 1 or 2 sore the minimum provision is a high specification foam mattress.

• Skin assessment;a patient’s skin should be assessed regularly to check for signs of pressure sore development.

• Self care; a health care professional should teach the patient and/or carer how to redistribute their weight.  They should also encourage skin inspection and how to notice possible signs of damage.

• A good diet; eating well and drinking enough water is very important.  It is particularly important for people at risk of developing a pressure sore or those with a pressure sore as their condition can get worse or fail to get better.

If you or a family member have suffered a pressure sore it is our opinion that the cause should be investigated to assess whether reasonable measures were taken to inhibit the development of what is an increasingly common but generally preventable injury.

CONTACT THE PRESSURE SORE CLAIMS EXPERTS

If you or a family member / friend have suffered a pressure sore whilst under the care of a health professional, whether that be in a hospital or a care home you or they may be entitled to compensation. Here at Gregory Abrams Davidson LLP we have a specialist team dealing with pressure sore cases. To discuss a Bed Sore Claim or any other Personal Injury or Medical Negligence claim, please contact us for a FREE initial consultation on 0151 236 5000 or 020 8209 0166 and ask to speak to Richard Malloy or Amy Bennett. Alternatively, you can email us at info@gadllp.co.uk or visit our specialist Pressure Sore Claims Website for further information at www.pressuresoreclaims.com and fill out our online contact form and we will contact you directly.

*Nice Guideline 29 – issued September 2005

A recently published Lancet Study analysed the National Joint Registry of England and Wales data for primary hip replacements (402,051, of which 31,171 were stemmed metal-on-metal) performed between 2003 and 2011. Metal-on-metal hip implants were always thought to more durable than other options but the recent study suggests evidence to the contrary.

The Study looked into the causes of total hip implant failure and in particular, whether metal-on-metal bearing surfaces and large head sizes result in improved implant survival. The Study was published just two weeks after the British Hip Society advised all patients with large head (36mm or greater) metal-on-metal implants to be kept under annual review. Please see our previous article entitled “British Hip Society Statement: 1 March 2012”.

The Study concluded that “metal-on-metal stemmed articulations give poor implant survival rate compared with other options” (such as ceramic, plastic and polyethylene) and “should not be implanted”. The Study reinforced the guidance of the British Hip Society in respect of the importance of monitoring patients.

Results from the Study reveal that the failure of metal-on-metal Total Hip replacements is related to the size of the head with the large headed implants failing earlier. Overall, 6.2% of patients require revision surgery within five years. This compares with 1.7 to 2.3 % of patients who had ceramic or plastic joints. The researchers calculated that each 1 mm increment in head diameter was associated with an approximately 2% greater risk of revision at any given time. The Study also found that the failure rate was notably higher in females.

For more information please see:

http://www.dailymail.co.uk/health/article-2114129/ALL-metal-hip-joints-banned-Failure-rate-times-higher-types.html?ito=feeds-newsxml

http://www.thelancet.com/search/results?searchTerm=metal+hips&fieldName=AllFields&journalFromWhichSearchStarted

If you would like to discuss a potential claim with one of our specialist team members, please do not hesitate to contact us on 0151 733 3353 or 020 8209 0166. Alternatively, you can email us at info@gadllp.co.uk

As a SME business investor, the Enterprise Investment Scheme (EIS) may not be for you, but you may like to try Seed Enterprise Investment Scheme (SEIS), or as the late Steve Jobs may have termed it, “EIS Nano”.

The idea for SEIS came out of the Government’s ‘Tax-advantaged venture capital schemes: a consultation’ in the summer of 2011. SEIS will support the Government’s growth agenda by helping smaller, riskier, earlier-stage UK companies – which may otherwise face barriers in raising external finance – to attract investment; facilitating these early stage companies to establish themselves and to grow.

SEIS will be similar in design to the current EIS but will focus on new early stage companies which are carrying on or preparing to carry on a new business and will commence from April 2012, applying to shares issued on or after 6 April 2012, but before 6 April 2017.

Tax Relief

SEIS will provide income tax relief of 50% for individuals who invest in shares in qualifying seed companies and an exemption for Capital Gains Tax (CGT) on gains on shares within the scope of the SEIS.

To “celebrate” the scheme, the Government will offer a CGT “holiday”: all gains realised on the disposal of assets in 2012-2013 that are invested in the same year in shares qualifying for SEIS income tax relief will be exempt from CGT. The requirements are similar to that of the EIS, but have lower monetary limits.

The main points to note are:

(i) income tax relief of 50% is available on the amount invested;

(ii) there will be an annual investment limit for individuals of £100,000 and the investee Companies using the scheme will be able to raise a total amount of £150,000.

(iii) the investor cannot be an employee of the investee company from the date beginning with the incorporation of the company and ending with the third anniversary of the date the shares were issued to the investor (Qualifying Period), however, he can be a director;

(iv) the investor cannot own more than 30% of the issued share capital or be lent any sum from the the company during the Qualifying Period which would not have been made at all (or would not have been made on the same terms) if the investor had not subscribed for shares;

(v) the money raised must be for the purposes of the qualifying business actively carried on by the company;

(vi) the money must be spent by the third anniversary of the date of issue of the shares; and

(vii) the investor company must be unquoted, incorporated within two years prior to the investment, have a permanent establishment in the UK, be independent and not control any other company, have fewer than 25 employees and gross assets of less than £200,000, and not have received any previous EIS or VCT investment.

Eligible companies

Eligible companies will need to have: – 25 or fewer employees, and – assets of up to £200,000 at the point of investment, and – have been established for two years or less, and – be carrying on, or preparing to carry on, a new trade which is one of the same trades as qualify under EIS.

To comply with the European Commission’s state aid rules, the company must meet a ‘financial health requirement’ at the time the shares are issued; so a SEIS investment cannot be used to rescue a company in difficulty. A company will be able to raise up to £150,000 in total and the maximum investment for an individual will be £100,000 a year. There must be no prearranged exit for investors and the company’s trade must be a genuinely new venture. The SEIS “window” will last five years.

It is important for investors and companies to note that, similar to EIS, relief can be clawed back and/or lost if the investee company ceases to qualify for SEIS during the qualifying period. Continued compliance with the requirements of the scheme must be carefully policed.

Summary

This is an extremely generous scheme which may not be around for too long. Qualifying investors looking to capitalise are entitled to income tax relief of 50% on their investment in the year of the investment, there is a complete capital gains tax exemption on gains made in 2012/13 which are re-invested in the same year under the SEIS scheme, and gains arising on shares on which SEIS relief has been claimed are exempt from capital gains tax.

The scheme will run alongside existing enterprise investment schemes and venture capital trusts and the Government has confirmed simplifications will be made to their rules.

The fundamental difference, other than the tax breaks, is that the SEIS focuses on investing in start-ups and other early stage companies looking to raise equity finance and allows investors to invest directly into one company instead of a vehicle that invests in several companies. Although this does increase the risk, it is hoped that the primary aim behind SEIS – to stimulate entrepreneurship and kick-start the economy – will ultimately trump any such risk.

These are exciting and opportunistic times for entrepreneurs…and for those shrewd investors who back the winners.

About our Team:

The Corporate Team at Gregory Abrams Davidson LLP specialise in connecting capital with opportunities – helping investors find the right opportunities, while working with high growth tech start-ups to ensure that they are “investor ready”.  We are also geared up to and experienced at advising on, negotiating and successfully completing small private company transactions. We would welcome the opportunity to assist any interested party with their deal.

About the Author:

Jonathan Abrams is a Senior Associate Solicitor, with experience in advising both public and private companies, particularly start-ups, SMEs and investors. Jonathan’s practice focuses on corporate and business transactions, with a particular focus on the Media and Energy sectors. Jonathan is a qualified US attorney-at-law and continues to counsel clients in both the UK and the US.  

If you require assistance or have any questions about Starting a business or investing in early stage businesses or SMEs, please don’t hesitate to contact our Corporate Team on 020 7979 2066 or email the author, Jonathan Abrams (jabrams@gadllp.co.uk), Senior Associate Solicitor.

The statement came following an annual meeting during which recent data in respect of metal bearing hips were discussed.

The following was unanimously agreed:

* Large diameter metal-on-metal primary total hip replacements using bearings of 36 mm or above should no longer be performed until more evidence is available, except in properly conducted and ethically approved research studies.

* This advice does not apply to hip resurfacing

* The British Hip Society endorses the guidance issued by the MHRA on the 28th February 2012. Patients who already have metal on metal bearing implants should be followed up.

* The British Hip Society will continue to monitor the latest research in this field and will provide further guidance once more information becomes available.

For more information, please see http://www.britishhipsociety.com/MoM%20Update.htm

We are currently acting for approximately 150 clients who have been affected by the DePuy ASR recall. We are 1 of 6 lead Solicitors across the country that have formed a group to work together on ensuring that patients affected by this recall receive the compensation they deserve.

In addition, we are currently investigating claims in respect of the DePuy metal on metal Pinnacle (information about which is contained in earlier blogs). If you would like to discuss a potential claim with one of our specialist team members, please do not hesitate to contact us on 0151 733 3353 or 020 8209 0166. Alternatively, you can email us at info@gadllp.co.uk