Legal Question in Business Law in California

Re: Forcloser on a private business loan

If they pay in full according to the contract, then the contract is completed and yes, they would 'own' the business. I don't understand your confusion. If they don't pay, and you want to sue to enforce the contract terms, do so.

Re: Forcloser on a private business loan

I deal in this stuff all the time, yet I am having a hard time figuring out what you're asking.

If you sold the business, why do you give a fig if the buyers walked away? I assume this must have something to do with your not getting paid.

Then, you go on to mention a loan. Who lent money to whom? Who is the borrower, who is the lender, and what security or collateral was given?

My guess, and it's only a guess, is that "we" sold the business and took a promissory note from the buyers are part of the purchase price. My further guess is that the buyers are in trouble and have stopped paying on the note, and that "we" have sent a demand letter.

My supposition is that the buyers owned the business from the date the deal closed last year. The sellers no longer own the business. The sellers own only a promissory note, or whatever was used to evidence the "loan" referred to. Perhaps the sellers obtained some collateral, and have perfected a security interest in the collateral.

Your post does not say whether the sale was a sale of corporate stock, or assets only, or anything else as to the nature of the business entity, what was sold, or the terms of sale. A proper analysis begs for such information.

Overall, my wild guess has to be that you sold a partnership, LLC or corporate business to buyers who gave you a promissory note as part of the purchase price, and that the purchasers have defaulted on the note. If so, they own the business and the sellers own a defaulted note. Whether the sellers can collect anything may depand heavily uopn whether the note was guaranteed personally by the buyers and/or whether any collateral was given (and if so, whether a security interest in the collatral has been perfected by recording liens agains real property or filing UCC-1s against personal property).

I would say that over 50% of business sales where the sellers extend credit to the buyers end up in defaults or similar problems. The moral of the story is that when you sell a business, get tough personal guarantees from all buyers, including liens on their homes, their boats, and their first born.

Please feel free to contact me directly for further thoughts and free advice.