Legal Question in Business Law in Arizona

I have a problem. My parents sold their business 15 years ago and the buyer has around 94000 left to be paid. He has been late on his payment over and over again and now he says he has a buyer interested. He wants to sell it but has decided that he does not want to pay the remaining 94000 and only wants to pay 30,000. They said no, that they can only go down to 75,000. My family has been depending on these payments to live and pay for their medical problems, heart issues and cancer treatments. Today they got a letter from a lawyer the buyer hired saying they had until Dec 31 to settle for 30,000 or else they will get nothing at all. It also stated he will not make anymore payments until they decide. They are beyond devastated by this letter and don't know what to do. They are also very worried about legal fees. What can they do? Do they have a case? Can this man still their business and money like this? They had a contract. Please help


Asked on 11/23/10, 5:14 pm

2 Answers from Attorneys
Kevin B. Murphy Franchise Foundations, APC

As a franchise attorney I can say it depends on what the Contract of Sale for the business provides. Usually the seller (your parents) take a security interest in either the business or equity in the buyer's home etc. to secure payment of the note. Was this done? If the buyer is delinquent on the note, they can sue and take other measures defined in the contract. They can also put a claim for the entire $40k into the escrow that is used for the new sale, which will give them a very good position. The entire contract of sale needs to be reviewed by an attorney familiar with these transactions. Perhaps you can negotiate the guy up to $35k (which is likely, given he offered $30k) and write the $5k difference off on your taxes. Very likely all that is needed is a good legal letter to the buyer's attorney pointing out relevant facts, etc. Money spent for this is well invested. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Attorney

Franchise Foundations APC

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Answered on 11/28/10, 5:46 pm
Donald W. Hudspeth The Law Offices of Donald W. Hudspeth, P.C.

We handle these types of matters all the time. The good news is that it is likely, depending on the documents of course, that you can demand payment, and get it. The bad news is that unless you have about $2,500.00 to hire a lawyer to analyze the documents, then send a demand letter and follow up with negotiations, and then if necessary $5,000.00 to litigate, they may simply decide not to pay you anything. Any good attorney can evaluate the documents and let you know how strong your case is before you make any large outlays of money.

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Answered on 11/29/10, 11:11 am


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