Legal Question in Business Law in California

Valuation of a Business in a Settlement

If a person does not pay the specified payments on a business loan purchase agreement for a period of five years and the person who carries the loan does not file a legal notice of default within that period, is the loan still due and payable? Must they file some legal document to declare a default or can a personal letter calling for full payment in default of the loan be considered legal? I keep seeing these papers going back and forth between individuals and attorneys but no where has anyone actually ever filed a suit. Should any of this be taken seriously?


Asked on 3/03/99, 4:39 am

1 Answer from Attorneys
Ken Koury Kenneth P. Koury, Esq.

Re: Valuation of a Business

It is a very complex situation as there are many exceptions to these general rules but here is the low down:

You do not have to file anything with a court to declare a default, a letter will work. You need to read the loan agreement. most general legal rules may not apply is the agreement says something different. If payments have not been made in 5 years there may be an issue re statute of limitations. It is 4 years for a written contract.

Ken Koury

Kenneth P. Koury, Esq.

5807 Topanga Cyn Blvd., Suite G-201


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Answered on 3/04/99, 12:32 am


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