Legal Question in Business Law in California

Pete, in order for someone here at LawGuru to understand your situation and provide some possibly-useful help, we'll need a few more facts and some clarification. For example, I don't know exactly what you mean by a "standby agreement." Which payments are to balloon - the buyer's payments to the SBA? Please tell us what the buyer agreed to pay you, how much of that was received as a down payment, what you were to receive thereafter per month and for how many years and with what percent interest, etc. -- and most importantly, what did you receive in the way of security for payment of these future installments on the purchase price? The absolutely MOST important part of any business-sale agreement is the security for the payment of any portion of the purchase price not paid in cash at closing. You need hard, hard collateral and a well-written security agreement, followed up with recording deeds of trust if the collatral is real estate and UCC-1s if the collateral is personal property such as the business assets, receivables, etc. Maybe the defaulting buyer can be sued, but the absence of collateral would put you in a weak position, especially if the buyer has borrowed from the SBA, which is experienced enough to get collateral from its borrowers and to place itself in a priority position to get repaid. Re-ask your question with about six times as many facts (no names, please) and let's see if some LawGuru attorney can find a way to save your bacon.

I agree with Brian we all need more information to give you useful advise as the only advise I can give you right now is to sue him for breach of contract is he stops the agreed payments to you. Please give us some more facts that track Bryan's questions.

Thanks and hope to see your re-post.

If you are saying that payments are due you, but are being withheld or refused for some reason, then you may have to bring legal action for breach of contract, fraud, etc. If the buyer and the business is still ongoing and making money, then you may be able to recover your money from them. If the business is going under, then you may have to look for recovery from the buyer himself. If he signed a personal guarantee, and if you have a security interest in the property, that will help you. However, if he is going bankrupt personally like a lot of people, then you face a harsh reality. The answers to all these issues will depend upon the terms of your sale documents to see how the loan'[s] and guarantees interrelate. If serious about getting a consult to see what can be done, feel free to contact me.

If you are saying the last payment due you has been made, then I'm not sure what your question is. However, that doesn't sound like your complaint.