Legal Question in Business Law in California

Business Promissory Note

My husband and I purchased a business as a 8 months ago, putting $50K as a down payment and the former owners financed the balance of $70K on a promissory note. The lien is against the business only. My husband and I feel we have made a serious error in purchasing this business and now wish to walk away. How would we proceed in informing the note holders that this is our intent?


Asked on 1/19/08, 5:18 pm

2 Answers from Attorneys
Jonas Grant Law Office of Jonas M. Grant, A.P.C.

Re: Business Promissory Note

Depends what you mean by a lien being against "the business" only and what the terms of the deal are. I can review the note, sale/purchase agreement, and bylaws/operating agreement if appliacable, advise you you accordingly, and, if you wish, attempt to negotiate a settlement and/or defend a lawsuit if in this are (SoCal), but I would would require a $1000 minimum retainer in order to do so, and my hourly rate is $225.

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Answered on 1/20/08, 4:56 am
Terry A. Nelson Nelson & Lawless

Re: Business Promissory Note

Tell them any way you like, but you're still liable on the note, and would likely be sued if you just walk away. You need to determine if you have a valid defense such as fraud. You'll have to negotiate your way out of this to avoid being sued. Feel free to contact me if you want actual legal advice or help in doing so.

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Answered on 1/21/08, 3:52 pm


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