LEIN from previous owner

[Ton80]

What is the name of your state (only U.S. law)? Oregon

Facts:

We are the buyer of a restaurant/Bar
We have an asset purchase agreement.
There is Language on retained liabilities.
There is Language on Indemnification.
There is Language on Third Party Claims
There is Language on Assumption of Liabilities.
The seller stated in the agreement that everything was owned free and clear.
The seller DID have a lein against his corporation (lets call it EAT OUT Inc.)
We purchased equipment from his Inc. as well as the right to use the name EAT OUT.
We did NOT purchase EAT OUT Inc.
We are being told that since we bought assets to run the restaurant, then we are now obligated for the debt.
They are demanding $10,000.

Thoughts or Suggestions.

 

[Zigner]

Who is "they"?
And, what exactly do they have a lien against?

 

[JETX]

We are being told that since we bought assets to run the restaurant, then we are now obligated for the debt.
They are demanding $10,000.

Thoughts or Suggestions.

Did you purchase the CORPORATION... or just some (or all) the assets??
If you did NOT purchase the corporation... you did not 'purchase' their liabilities.
This would be no different than your purchasing a car from a corporation then the corporate creditor pursuing you for their claim.

What EXACTLY is the lien against (furniture, equipment, etc.) and did you acquire that/those items??
If the lien is against ANYTHING you purchased and if they have a security interest in 'it', then the seller likely did not have the ownership right to sell and the lienholder could likely force its 'recovery'.

What EXACTLY does your purchase agreement say as to your purchasing the assets AND liabilities??

Also, your post says you have an 'indemnification clause' as part of the purchase. What EXACTLY does it indemnify??

As you can see, there are a LOT of things to be considered. I suggest you take your purchase documents and their demand to a local attorney who can review ALL the issues and advise properly.

 

[Ton80]

We did not purchase the corporation.
There were some excluded assets.

I obviously have to check into the specifics of their lein so I could answer some of the questions.

THEY are Rewards Network Establishment Services Inc.

ONLY 2 items listed as Buyers Assumed Liabilities (Schedule B).
P.O.S. System & Lease
Dishwasher Equipment Lease.

HERE IS EXACT LANGUAGE IN CONTRACT
Buyer will assume only those Liabilities of Seller set forth in Schedule B related to the Restaurant (the "Assumed Liabilities"). Except for the Assumed Liabilities, Buyer will not assume or be obligated to pay or perform any liability of Seller (the "retained Liabilities"). the Retained Liabilities will remain the sole responsibility of Sellers.

I am sure I will need a local attorney by the time this is done...I just want to have a better understanding of the situation before taking that step.

Thanks for your Time and advice.

 

[JETX]

Buyer will assume only those Liabilities of Seller set forth in Schedule B related to the Restaurant (the "Assumed Liabilities"). Except for the Assumed Liabilities, Buyer will not assume or be obligated to pay or perform any liability of Seller (the "retained Liabilities"). the Retained Liabilities will remain the sole responsibility of Sellers.

And with that... I think you have a good case. Contact the lienholder in WRITING and advise them that you have NO obligation to them, as the seller RETAINED all liability's not specifically noted in your purchase agreement. If they press, provide them a PORTION (or excerpt) of your agreement as you have done here.

 

[FlyingRon]

What was leined. If any of the assets that you purchased had liens against them, no disclaimer on the part of the seller or your self will make them go away.

Grab all the information and take it to the lawyer you had to do the sale. Business transactions are not amateur hour things.