Legal Question in Business Law in California

It sounds like you were purchasing the business, not the corporation. So I am not sure how significant it is that the corporation was not in good standing. The fact that you relied on false financial information is an issue and an attorney would need to review the purchase agreement to see if you waived any rights. Many agreements contain due diligence provisions that state that you are not relying on information, etc.... The lease they assigned was the lease they had. Many leases entered into before the economic downturn are at rates that are no longer competitive, but I don't think they misrepresented their lease. They offered to assign the lease and you accepted it. They did not have any obligation to renegotiate their existing lease. You need to take your purchase agreement and related documents to a lawyer and have them reviewed.

Depends. If you can prove actual fraudulent concealment and misrepresentation of the books, income, sales, inventory, orders, capital value, etc., then sure, you can sue. If you were simply negligent by failing to conduct an effective 'due diligence' investigation about what you were buying, then a law suit is going to be money and time wasted. Now, if you think you can prove what is needed, feel free to contact me to discuss the actual facts, costs, risks and rewards of suing.

The "dissolved corporation" part of your argument is a waste of time, as I tried to point out in my previous answer to your mid-day version of your question. As far as the tax returns go, most businesses that "fudge" their returns will be trying to look LESS profitable than they really are. You should have had them give you permission to ask the IRS for copies of the as-filed originals.

As far as fraud goes, you will need to plead and prove a material mis-representation of fact, or concealment of a material fact; that you relied upon the misrepresented or omitted fact in deciding to buy or how much to pay, that such reliance was reasonable, and that you suffered harm as a result of your reliance.

If you can do so based on admissible evidence, a suit for fraud may be worth while, and you should discuss the possibilities with a lawyer. However, the status of the corporation as dissolved adds nothing to your possible complaint, nor is it likely that the overpricing of the premises lease adds anything unless it was concealed. Courts will not compensate you for paying too much.

Well, the first question is whether you bought the shares of the assets of the corporation. Second, I would assume that you have a written purchase agreement that spells out the various seller warranties on such transferring of assets or shares. So, in order to fully answer your question, you will want to select an attorney and provide him/her with a copy of the purchase agreement. Often your rights and responsibilities will be detailed in the signed agreement.

By Grace...

Shawn Jackson ESQ. (707) 584-4529

Business Development Attorney EMAIL: [email protected]

www.CaliforniaBusinessDevelopmentAttorneys.com

www.CaliforniaBusinessDevelopmentCenter.com

www.CaliforniaBusinessDevelopmentPlans.com

No communication resulting herein shall create an attorney-client relationship unless a separate retainer agreement is signed by attorney and client. The information provided is not legal advice nor is it conveyed in the course of an attorney-client relationship, but is intended merely as a general overview with regard to the subject matter covered. You should not act upon this information without seeking professional counsel such as any attorney in this office in a subsequent email communication (agreement) and the formation of an attorney client relationship.

Yes, please email me some basic facts about the business, what kind, how much you paid, key issues.

Best,

Daniel Bakondi, Esq.

[email protected]

415-450-0424

The Law Office of Daniel Bakondi, APLC

870 Market Street, Suite 1161

San Francisco CA 94102

http://www.danielbakondi.com

IMPORTANT NOTICE: This communication may contain confidential information, privileged information, or attorney work product. If you are not the intended recipient or received this message in error, any use or distribution of this message is strictly prohibited and unlawful. Please notify the sender immediately, and delete this message. No attorney-client nor confidential relationship is created through this communication. Nothing communicated or provided constitutes legal advice nor a legal opinion unless it so specifies and written agreement for attorney services has been entered into. Attorney licensed in California only. Your issue may be time sensitive and may result in loss of rights if you do not act in time. Thank you.