Legal Question in Business Law in California

Possibly, but most generally an agreement to sell a business does not include the right to take back the business if the buyer defaults on payments. Most likely, you have a claim for money damages, and that's it. However, it's not impossible that your sale agreement also contained some kind of collateral support for the buyer's promise to pay. This could be in the form of a lien, security agreement, etc. on the personal property and, if the sold business included real property, maybe there was a deed of trust securing the purchaser's obligation. It sounds as though the business owned real property, since you are talking about taking back possession and locking the buyer out. (You mustn't do that, by the way).

The threat of bankruptcy should be taken seriously. It can happen almost instantly, and when it does, the buyer and the business will be under the jurisdiction of the bankruptcy court. You will be in a line with the other creditors, trying to figure out the priority of your claim and the likelihood that you'll recover 99c on the dollar, or 5c, or nada.

Right now, you should review the quality of your business-sale documentation, and hope the lawyer who drafted it for you has left you in the position of a well-secured creditor

I sugges having your documents reviewed by a lawyer, to determine what your rights and remedies are, before setting off and engaging in self help that may get you into trouble.

Well, this is an opportunity for both parties to participate in mediation...and a variety of companies offer some level of free or low cost mediation. As noted by the previous attorney, both parties have a vested interest in acting appropriate so that both parties can move to the next level in a reasonable manner. If you choose to "fight it out", it will be costly and the recovery may be slight...call if you have any questions or concerns.

By Grace...

Shawn Jackson ESQ. (707) 584-4529

Business Development Attorney EMAIL: [email protected]

www.CaliforniaBusinessDevelopmentAttorneys.com

www.CaliforniaBusinessDevelopmentCenter.com

www.CaliforniaBusinessDevelopmentPlans.com

www.CaliforniaBusinessDevelopmentIncubator.com

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