Hunger strike businessman case shows vulnerability of UK businesses, MSPs told

The case of a businessman on hunger strike shows how vulnerable UK businesses are to abusive treatment'' by lenders and vulture funds, the Commons has heard. SNP MP Angela Crawley raised the case of John Guidi, who is protesting at his treatment by Clydesdale Bank and Cerberus Capital Management.

Ms Crawley said her Lanark and Hamilton East constituent has been made personally bankrupt and risks losing his family home within weeks.

She urged the UK Government to enable an independent financial tribunal to resolve such disputes in a fairer way.

Treasury minister John Glen said he would meet Ms Crawley to discuss her concerns and that he was taking the case very seriously''.

He also told MPs that he understood enforcement action against Mr Guidi is on hold and both Clydesdale and Cerberus have offered to meet him.

Asking an urgent question, Ms Crawley told the Commons: In 1998, John Guidi built a business in the west of Scotland to a portfolio of almost 150 properties. Clydesdale Bank backed that business from its very beginning.

He had told me how he was treated by bank chiefs as a model customer and in only 15 years he built a property business worth £60 million.

He never missed a payment and was in regular communication with the bank and bosses, and appeared to have a great relationship with the organisation.

In 2002, my constituent has informed me that Clydesdale Bank changed the structure of his loans - introducing him to the tailored business loan.

Later in 2014, Mr Guidi informs me that Clydesdale Bank sold its tailored business loans to Cerberus Capital Management - an American private equity business.

He says they aggressively pursued the debt and subsequently put his company into receivership a few months after purchase.

As a result of my constituent signing a guarantee, he has been made personally bankrupt and the company is pursuing his family home.

He only has a few weeks before he is evicted and he's taken the decision to start a hunger strike in protest.

This tragic case brings to attention the vulnerability of UK businesses to the abusive treatment by lenders and vulture funds, and the inadequacy of the current regulation in preventing it.

Sadly, John is not alone. There are hundreds of people across the UK that had their tailored business loans sold by Clydesdale Bank to Cerberus Capital Management.''

Ms Crawley said Mr Guidi wants a fair say'' and has requested his case go to an independent arbitrator for review.

She added: Is now not the time to pursue an independent financial tribunal to ensure that my constituent can take forward adequate remedy for his dispute resolution of his case?''

In reply, Mr Glen said: I understand enforcement action is currently on hold as legal proceedings have been brought against Clydesdale Bank and Cerberus, and I understand that Clydesdale have offered to meet Mr Guidi, and as are Cerberus as well.''

He added: It's common across all jurisdictions for banks, at times, to sell off parts of their portfolio of debt.

The question becomes what is the appropriate mechanisms and safeguards in those cases.

We know when the sale of debts are made to third parties it is covered under the Standards of Lending Practice, to which Clydesdale are a signatory, and that means they are committed to ensuring that third parties who buy loans have demonstrated that customers will be treated fairly and to allowing customers to complain to the original lender if there is a dispute between the business and the third party which cannot be resolved.

But I'm very happy to meet with (Ms Crawley) to go through the full extent of her outstanding concerns on this matter and I take this matter and case very seriously.''

For Labour, shadow Treasury minister Jonathan Reynolds said: All people and all businesses in the UK deserve a mechanism that provides them with access to justice in the event they end up in dispute with their financial services provider.''