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QLD Redundancy - Employer Should Pay Credit Card Debt During Employment?

Discussion in 'Employment Law Forum' started by Tom Murray, 16 December 2014.

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  1. Tom Murray

    Tom Murray Member

    16 December 2014
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    I was employed by a Co-op as manager. I used my personal credit card to pay many accounts for the business as there was always a cash flow problem. The company directors recognised this and thanked me on my redundancy for the use of my credit card. I am still owed $14,000 odd (now credit card debt) and since they have applied for the co-op to be placed in the hands of a Adminstrator. The co-op operated while insolvent for a lengthy period. The remaining funds will not be sufficient to cover the fees of the Adminstrator.

    My son took on the role as manager upon my departure some 2yrs 9mth ago. He is owed over $8,000 in superannuation that has not been paid and will not be paid as the Administrators consume the remaining moneys.

    Do I have a right to Lodge a suit against the directors? The Directors have never signed a Directors guarantee. The meeting to decide the outcome of the Creditors meeting with Mackay Goodwin, the administrators is 18/12/2004. Liquidation or other avenues.

    The good will of the Directors is Questioned.

    Rebates were paid to some directors only as there was never sufficient funds to pay other members of the group.

    My long service leave was paid over a period of 2.5 years. I increased my credit card limit from $25,000 to $52,000 to assist the co-op. Interest owing is now apparently out of my reach.

    My wife & I are on a aged pension. My son's position was terminated some weeks ago, as the Directors advised him of their intention to place the business in Liquidation.

    Please convey your thoughts and advise me of any action we can pursue.

  2. Sarah J

    Sarah J Well-Known Member

    16 July 2014
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    Hi Tom,

    This is a terrible situation to be in. Unfortunately, when an organisation becomes insolvent, not all creditors can get their loans/money back. Almost all creditors lose out. The best option is to contact the Administrator and inform him/her of your debts owing. They have a duty to act in the interests of all creditors, which generally means they will apportion remaining funds amongst the creditors.

    You could think about taking legal action against the directors for breach of fiduciary duties to the organisation. Alternatively, against the directors for breach of representation/contract against you, personally. Take care though, because as a manager of the organisation, there may be a duty on you to supervise accounts and therefore, know the financial position of the organisation. However, extending personal loans to the organisation, if at the request of the directors, could possibly constitute breach of duties.

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