Sale of Business Falls Through

[Midme]

I "sold" an auto shop that my deceased husband left to me. The buyer and I signed and dated a contract of intent to buy and sell in March. 7/14/00 he informed me that he was not buying the shop, that the person he had working in there was not working well, his backers fell through and now he wants to sell. The problem is he put money into the shop and is now 90 days default on payments to me. He is refinancing his home and I heard that once that is done he plans to file BK. That may mean I will never be paid. Someone suggested that I place a lien against his home after the refi. I will know when the refi happens because I know the person who is handling that for him. Will a lien protect my interests? How do I go about filing the lien. This is very important to me as the sale of the shop was for my two son's college. Please respond ASAP.

 

[JETX]

Your post says that this was not a sale, but was a 'contract of intent to buy'. This is normally done so that a prospective buyer has the opportunity to review the complete business, but is not a contractual committment to purchase. Either the buyer or seller has the right to rescind the 'deal'.

Take a look at the contract. What does it say about either party rescinding? What does it say your options are? It probably allows some compensation or penalty for 'dropping'. Also, if a 'contract for sale' as you say, it probably precludes your pursuing any further actions unless noted in the agreement.

Also, you say that he 'put money into the shop and is now 90 days default on payments'.
You might need to offset his funds with his 'missing' payments and get the property back for resale.

Bottom line... this issue has many different possible scenarios... all depending on what the 'contract to sell' says. You really need to have a competent local attorney review the documents and advise you on your available options.

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Steve Halket
Judgment Recovery of Houston
[email protected]
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This is my PERSONAL OPINION and is not legal advice! Consult your local attorney for your specific situation and laws!

 

[Midme]

Thank you for replying. The contract did not mention resinding. The method of payment was clearly outlined with due dates and exact amount due with 2 options. One with full payment and one with 12 monthly payments and then a final payment of the balance. Each page was signed and dated with the payment option choosen. Does any of this make a difference?
Thanks

 

[Tracey]

Did the contract specify that the title to the business passed with the first payment or with the last payment? If it passes with the first, did you retain a financing lien on the business? If not, you'll have to sue to rescind the contract so you get title back. Using a lawyer in the first place would have been much better.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.

 

[Midme]

Thank you for replying. I realize now using a lawyer would have been the wisest. I don't really want the business back as he as managed to destroy it in the 4 months. I've heard that they was drug activity and very little consistency with hours, no phone machine etc. I'm contacting a lawyer today.