Buying and Selling a Business

" Blanket Security" get priority over a secured debt

rickyone — Fri, 23 Oct 2009 16:19:06 GMT

Can a bank imperfect "Blanket security" get priority over a perfected secured Note?I went in a silent partnership with a crookwith 300,000.00 cash investment , I purchased all equipment he signed a security agreement that we filed as a UCC and perfected it by recordation in Riverside County California.

Now the guy has sneaked out made sweatheart deal got $100000.00 under table cash from the buyer opened an escrow for 150000.00 dollars and even the UCC search I am the first and second registered creditor refuse to pay me the money on the ground that the seller had a "Bank Blanket security" not registered or perfected on this location but in all his other location which he got financing by the Bank.

I am a first lien s... and perfected and has priority over every one why the Escrow does not release my money? Where can I find rulings on this ? and how can I get help to release my assets?

Each partner wants to keep the business.

AlexMA — Tue, 27 Oct 2009 18:18:08 GMT

Three partners decided to split (after 1 year of fighting). Each of us wants to keep the business. What is the standard procedure? Court is not an option.

Breach of Non-Competition Covenant or no?

lilmary925 — Mon, 12 Oct 2009 18:15:39 GMT

Hi,

A little background info before I go into details: My fiancee and I have purchased a dental practice a little over a year ago. The one year mark for our transition will be coming up on October 14, 2009. The old dentists still own the building and we purchased the goodwill (which is the patient base), clinical/clerical supplies, furnishings & equipment, & a non-compete convenant. The previous owners were in business since 1987 so they are well known in this community.

In our purchase contract, the non-compete covenant states, "In connection with Seller's sale to Buyer of the assets listed herein, Drs. ** and ** shall neither individually, collectively, nor in any combination, directly or indirectly, as a shareholder, director, officer, partner, associate, consultant, agent, independent contractor, employee, or otherwise, carry on or engage in the practice of dentistry anywhere within a twenty (20) mile radius of the present location of the Practice for a period of five years following the Closing Date. Drs. ** and ** further agree for the same five year period, and within the same twenty (20) mile radius, that Drs. ** and ** will not, directly or indirectly, individually or as an employee, agent, partner, shareholder, consultant, or in any other capacity, contact, or in any manner solicit or accept any of the practice's patients."

The Doctors have now opened a dental office 21 (twenty one!!!) miles away from our office within the last 4-5 months. They have also sent out a letter soliciting our patients.

My question:

What options do I have at this point? Is this legal?

I'm so upset I don't know what legal action I am able to take.. Please help! Or point me in the right direction. Thank you!

-Mary

Partner buy out after death

beantownsouth — Wed, 30 Sep 2009 02:05:34 GMT

I work for a small, private company of approximately 16 employees and we do about $6.5 million a year in sales.

The company had been owned by two business partners for 21 years. Recently, one of the partners passed away unexpectedly and the existing partner purchased the other 50% the company from the deceased family. The purchase is being paid for on a monthly basis out of the company funds and the owner also takes a hefty salary. Is this a legitimate way for him to pay for the business? It seems like double dipping to me and it is creating a cash flow issue for the company.

Additionally, I have just discovered that a number of patents have been applied for by the owner and the legal fees associated with the filings paid for by the business. The problem is that the patent filings have absolutely nothing to do with the business that the company is in. Again, is this legal?

I am certainly not trying to 'stir the pot', but I have been very instrumental in growing the business to where it is today and I am a little concerned that I may be looking at a very dim future.

3rd party liability - unhappy with my lawyer

Patricia office mgr — Fri, 11 Sep 2009 03:05:03 GMT

I would like to see if anyone agrees with me. My lawyer won't listen;

basic facts:

My husband and I have a very small accounting practice. A former client is being sued by someone who is claiming personal injury because they were going to buy this former clients business, but the business became insolvent before the deal went through. We are named in the suit because we were the accountant for the business that failed.

Facts: our firm never prepared audited financial statements for the client. We were never asked to prepare audited financial statements, and we were never asked to prepare any information for a third party. We were not even aware this client was in the process of selling his business. We were doing their bookkeeping and prepared some management reports. We didn't even do their tax return. They had a location in another city, and they had another accountant there that prepared the taxes.

I say we have ABSOLUTELY NO 3rd party liability in this case, and it's rediculous that we're even named in the suit (The whole suit is stupid, because the guy never even actually invested any money. He moved from out of state, worked for the business for 6 months, and earned $200,000 salary. Where's the injury?)

Our lawyer won't listen to me. He has built our entire defense around the fact that we aquired the accounting practice from someone else around the same time this other transaction was taking place. He's trying to say our predecessor is actually a different company and we have no liability because of that. But it is really dragging out, and it's going to be difficult (in my opinion) to convince a judge or jury on that point since we kept the same clients, the same location, and the same employees as our predecessor. We were a different company in the documents to transfer ownership but that's about all. Plus I think it makes us look guilty to say "oh no, that wasn't really us that did that." Did what? Neither us or our predecessor produced any certified financial statement! So this keeps dragging out and the dumb lawyer has charged us inordinant fees for this lame defense.

I think the 3rd party liabilility issue should have been a strong enough argument to get a summary judgement. THis whole thing is stupid. It was a business to business transaction and the potential buyer did not do his due diligence! And we never produced any certified accounting information ! (We knew the business was in trouble, if any body had asked us. The owners had their head in the sand.)

So is my lawyer barking up the wrong tree? Or am I the one on the wrong track?

where to start: want to buy out business partner

smallbizhelp — Wed, 29 Jul 2009 18:43:09 GMT

ok, so a year and a half ago, i started a small biz that with a friend (1st mistake). we never wrote up a business plan (2nd mistake) therefore we never took out a business loan (3rd mistake). we each put purchases on personal credit cards until we finally opened a company cc and started using that. we make baby products. we don't live in the same state. i have done EVERYTHING for the company; all the paperwork (state filing, invoicing, forms, etc.) and i make about 80% of our products. basically, she doesn't do anything, and i need to know the best way to approach 'buying her out.' our company isn't worth anything and has yet to make a profit. her husband is very hands-on with every penny that is spent at their house, and i'm surprised he has let her do this. but i'm thinking if i offer to just pay off her credit card debt and have her sign i legal document that might be good enough, but i really don't know. if the company doesn't do anything within a few years, i'd like to have it fail on my shoulders alone. she is an unstable person with way too much going on in her personal life. i am the ultimate decision maker for the company, my father and step mother have helped us out financially with items like our logo and website, my father-in-law does our taxes, and my step-father does graphic design for us- so really she brings NOTHING to the table and is just really starting to piss me off as of late. i need help!! what kind of lawyer do i need to contact and just how much money is this really going to cost me?

business purchase

EANDINO — Sat, 18 Jul 2009 13:54:01 GMT

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I purchase an online business in February 2009 I have paid the seller $19000. And own him $6000. Due 1 year after purchase. I problems started with the seller closing down the site after I paid my deposit to do the transfer of the site. And it turned out to be one problem after another to get the site back up. In any case the site was down for over 3 months in fact the site was reopen on 06/01 and still not working correctly. I feel that in the 3 months the site was closed it loss all of the value and is now worthless. When I purchase the site it was bring in sales of $275000. Per year. For the month of June which was the first month reopen sales were less than $2000.00 for the month. The seller is trying to tell me that the loss of sale is because of the economy. And my response of him was that yes the economy is bad but not to the point of going from $20000.00 plus a month to less than $2,000.00 per month. This is just one of the issues we have there are a number of others.

I have spoken to a lawyer in Cape Coral, who agrees that the seller was in breach of contract, but he believes that I may need a lawyer in California because that is where the seller is?

Please let me know if you think you can help with this issue?

Thank you

Deficit Escrow in a Business Sale

BZGIRL — Tue, 14 Jul 2009 05:57:44 GMT

i sold my business. the amount in escrow will not cover outstanding tax and judgment debt. its my understanding that under the california business and professions code #24074 div 9 abc that creditors can not come after me after the sale/business transfers. i may have a fraction of the debt to offer them at best.

ps 2 of them have liens on my home. my home is currently in default. im not filing BK.

im hoping they will take what i ever i have to offer to sign off on the debts.

can i get some feed back on these proceedures?

thanks

Buy/Sell Agreement

Lawrence Schulman — Wed, 10 Jun 2009 15:07:26 GMT

I am presently involved as a third genereation member in a family business. There are 2 partners and my father is being bought out of his share of the business. He requested for 1 yr a complete list of all assets and when he received the list it was discovered that there was approx 700,000 worth of COLI cash value insurance not listed as an asset.

Is this fraud or intent to committ fraud. You should also be aware that the accountant told our attorney that he had no knowledge of these policies. Is the accountant potential liable for some issues with his license for this perpetuating a fraud.

What are our legal options outside of not signing the agreemnet and suing the other partner.

Seller Transfer no Escrow-Endemnify Buyer

BZGIRL — Tue, 09 Jun 2009 07:24:32 GMT

Due to unforseen hardship and family emergencies I accumalated a large amount of debt. I am a sole proprietor. The business is profitable but not enough to cover my personal debt service and I lack the resources to survive this economy and grow. I have a potential new tenant that the landlord will approve. Landlord will indemnify me of my 70K note to him (ive been his tenant for a long time and he is sympathetic to my unforseen situation) and assign my lease with the transfer. New owner (financially, more appealing to landlord) will keep same name but will INC. or LLC changing the name slightly. I have a couple of judgements and a little bit of taxes due amongst a few credit cards. We had agreed to him paying some of my other bills. On a seperate note, he will be providing me with a job/contract for 2 year for consulting and i can retain a smaller space i have had with the landlord to help me generate income to pay debts and raise family. its a win win win for all but Can I legally avoid escrow in this scenario? How can we make the transfer with out him being liable for my debts? I plan on negotiating the debts after the transfer. I absolutely have no plans to file BK. I am afraid that with out enough money for escrow to pay debts it will kill the deal and ultimatley EVERYONE loses money. Of course initial reaction fom his attorney is to try to go to escrow. I need a loop hole here to get us by for a while. SAFE CREATIVE STRATEGY NEEDED! This is a much deserved chance at a new beginning.

Buying a buiness

vista2 — Tue, 02 Jun 2009 02:19:08 GMT

Iam buying a buisness which is very small chicken wing place.I never bought a buisness.it is about$10,000 value.but i have question do i need to hire a lawyer i can do paper work my self.what kind of paper work i need to fill up taking over the buisness.is there any where in the web Ican get any resources.this buisness locatet in Georgia pls advise me thankyou.

Legal Aid on Success Fee basis

PRS13 — Mon, 18 May 2009 16:19:35 GMT

I was wondering if there are any law firms who offer legal aid on a success fee basis (we do not have the money to pay for legal help). This involves an international business acquisition case in the US & Brazil, so believe the lawyer can be located anywhere in the US.

Many thanks

Merger

JWC123 — Thu, 07 May 2009 01:12:26 GMT

Hi,

I'm hoping I can get some help here. On March 1st we merged with another company that does the same thing we do.

In this merger we agreed to turn over our business for 20% of the new business. That means that I received 20% and my partner received 20% giving us 40% of the business that we merged with.

In return we turned over the base and were suppose to bring in enough revenue to pay our salaries. Well we've done that and were out producing this other company 2 to 1. In the signed contract the other company agreed to pay our salaries and the debt. Now that were going on 3 months this company still hasn't paid the debt that they agreed to pay and they have decreased our salaries.

I need to know what I need to do from here? I feel like it's all take and no give. We've given this company everything and were not getting anything that was promised. And on top of that the guy that has the majority in the company is real rude and abusive.

Help!

JWC123

overseas lawyers

Mikeo1313 — Wed, 06 May 2009 07:10:04 GMT

Overseas lawyers are a very risky proposition. I've heard of countless unscrupulous atrocities commited in by lawyers & judges in 3rd world counties for terribly petty ends.

Is there any world wide webpage / organization that acts as the BAR does in the united states??? .... Where you can atleast investigate or read commentary on a lawyer and have some kind of heads up???

Overseas business credentials

Mikeo1313 — Wed, 06 May 2009 06:54:59 GMT

If you have a company in US you can undergo typical country specific process to establish the company overseas at a very high cost, with many conditions, 3-6+&... time delays and/or minimal proof of deposit amounting to $100,000.00 US and or more.

Often times even the largest of companies buy a company name thats allready registered by a local and have them surrender rights.

I have contacts to do this in the Dominican Republic but can anyone suggest the best way to do the same in Mexico, Guatemala, Nicaragua, Honduras, Colombia, Panama, Brazil??? I'm clueless

Thanks

I got screwed on a business, can anyone give suggestions???

brianfr — Tue, 28 Apr 2009 21:50:19 GMT

Here is my issue. In December 2008, an acquaintance of mine asked me to join her business in Northeast Philadelphia. The agreement was that I was to pay her $3500 to join her business which I did. I started working with her in January through February without receiving any money because she said she was struggling financially and would not be able to keep up with all of her bills. A week before March she was evicted from the property by the landlord for being delinquent in rent, which actually went past the January/February time period, that I had worked there.

My “partner” had a meeting with the landlord and he was supposedly letting her out of the contract and at this point I was to take over in March once the landlord was out of the hospital. In the meantime I had spoken with the landlord’s partner who told me to keep running the business as it had been run until the hospital ridden landlord could get out of the hospital and get a contract ready. It turned out the landlords ended up suing my “partner” for the past due rent.

My “partner” took off to start a new life in a different state leaving behind her vehicle and possessions and subsequently all of her bills. Here’s the kicker to the story. My “partners” ex-husband co-signed the lease on the business and became responsible for the business (and her vehicle) since it was apparent that my partner was leaving without any plans of coming back for any of her possessions. I was told by the landlord and her ex-husband to hand over the keys to the business the last week of March, after only recovering $1,000. I ended up paying the past due utility bill and I do have a few pieces of paper that my “partner” signed indicating that I paid her to join the business but nothing written up by a lawyer.

I have spoken with her since this incident has occurred and she has told me that it is not her responsibility to reimburse me because it is not her business anymore. So here is my question. Do I have any legal rights when it comes to recovering the money that she has pocketed from me? What timeframe do I have to report this and who do I speak with about this situation? Also, I’m not completely sure of her current location although I do have her past information from when she was a resident of Philadelphia, is it possible to sue without her current location?

Thanks,

Brian

Taking over a company

fcampos33 — Tue, 28 Apr 2009 20:32:25 GMT

My husband has been with his vending company for 25 years now, and It's a very small company only 3 employees. Now the owner of the company wants to give him the company to take over. Can anyone please give me some advice on what steps we need to take to consider taking over this BIG responsibility. Is there anyway to find out if this company is current with taxes, and if there is any outstanding debit.

Please advise.

Buyer financing of business sale - suggested down payment?

TimL — Tue, 28 Apr 2009 00:51:25 GMT

We received an offer to buy our business and while I would have loved to receive an all-cash offer, it was a monthly-payment with interest offer. Now I know that sets off red flags (the post comment about 'there must be a reason they can't get a loan from a bank... they will most likely default' comes to mind). If I were to entertain such an offer, is there a suggested down payment that is more commonly seen these days? The total sales price would be 90k. If you were to ever entertain such an offer, what amount of a down payment would make you feel comfortable?

TimL

Role of broker vs lawyer

TimL — Tue, 28 Apr 2009 00:47:13 GMT

I own an LLC here in Texas. We have a storefront bakery using a dba. We have a 5 year lease on the storefront that the landlord required us to sign a personal guarantee for. We have been approached to sell the business and my question here is about the role of our selling agent vs a business/contract lawyer.

The selling agent has a CPA background and is not a lawyer. When we purchased the business, we drafted an asset purchase agreement that was reviewed by a lawyer for any obvious exclusions. When pursuing the sale of our business, what is the role of the broker vs hiring a business laywer to review another agreement? A potential buyer has submitted a written offer to our agent, but I'd like something a lot more thorough. Should I draft an asset purchase agreement, run it by a lawyer, and use the broker as the laision between us and the potential buyer? I know there isnt a clear answer just looking for your advice--

TimL

End partnership and start over (?)

johngray — Wed, 18 Feb 2009 16:06:49 GMT

I own 50% of a business and no longer wish to continue with partner. Can I demand that we liquidate and go our seperate ways? Partner has offered to sell, but I think it would be cheaper and cleaner to start all over on my own. We can not agree on a price. They dont want the business to end in the first place but feels pressured to make an offer.

Do I have a case?

fairplay3 — Tue, 17 Feb 2009 21:03:41 GMT

I had a successful shipping/packaging franchise for 12 years. I decided to sell it. Another new franchisee in the same town decided to buy it.

The deal had to be approved by the corporate franchise office. Once they said it was OK, I had to sign a Deed of Trust, even before an escrow account or money had been exchanged. When I called the Corp Transfer Office, they said that was the only way they would process the transfer/sale of the store. So we signed the Deed, even though we had no escrow money from the buyer.

When closing time came, the buyer still had not put any money into the escrow account for the agreed selling price. When I called the Corp Legal Dept and said I did not want to transfer the store until I had received my money they said I had no choice, that the Deed of Trust was already signed.

The Corp Legal Dept said I would have to sue the buyer in Civil Court to get my money for Breech of Contract.

When I spoke to one of the Head VP,s in Franchisee Relations he took my information but would never call me back.

I spoke to the Area Franchisee Rep who told me I would have to pay all the transfer fees, upgrade fees and any unpaid bills the new buyer had before Corp would transfer the store back to me.

Bottom line, I ended up filing bankruptcy and the new owner ran the store into the ground in 6 month and then moved to New York leaving employees and vendors unpaid.

Come to find out, Corp did NO credit check or made any effort to see if this was a good buyer.

I do not have the money to sue a giant corporation and the Bankruptcy Trustee can not fine the buyer who moved to New York,

Rescinded Contract

seeking information1 — Wed, 04 Feb 2009 18:32:53 GMT

I was in the process of purchasing a Cafe and had a contingency based on the availablity to secure an agreement with the landlord. The date where my money went hard came and no agreement had been reached. I asked the broker to redate the PA and was told it was not nessesary as long as a lease agreement had not been reached. In the meantime I found out some information regarding my ability to finance or secure the business and recinded my offer. I am now being told that the earnest money deposited can not be refunded. Do I have any recourse.