Legal Question in Business Law in California
''Vendor liens restaurant bank accounts for double amount owed causing restauran
Restaurant A owed Vendor B approx. $6,100 for supply. (A)& (B)agreed to monthly payments. (A)made regular monthly payments of $1,000 for ten months. This left a balance of approx. $6,000. (B)liened (A)'s bank accounts for $16,000 the original balance. (A)had two business accounts with a total balance of $13,000. Bank allowed lien for $13,000 plus fee. This lien caused (A)to be unable to pay rent,payroll,etc. (A)was soon evicted by landlord for non payment. This put (A)out of business. (A)was only able to recover the money that they had over paid due to lien. This amount was paid back several months later and by this time it was to late. Does restaurant(A)have a case against vendor (B)
2 Answers from Attorneys
Re: ''Vendor liens restaurant bank accounts for double amount owed causing resta
There may be a lawsuit for the destruction of business and wrongful collection actions. I would want to know how they did the lien.
Joel Selik
800-894-2889
www.taxworkout.com
Re: ''Vendor liens restaurant bank accounts for double amount owed causing resta
Pre-judgment liens on business bank accounts are not easy to obtain, especially without some kind of notice and hearing. If you did not receive notice and a hearing, there may be some abuse of process or other actionable conduct on the part of the creditor. The only way to know would be by review of the court file and any correspondence between the restaurant and the creditor regarding billing and collection activities.
Among other things, a prejudgment lien without hearing requires the creditor to make a strong showing before the local ex-parte judge that the debtor is unreliable and may abscond with funds needed for payment (or the like).
Further, liens for double the amount owed are suspect. The creditor may have made a fraudulent presentation to the court, in which event the debtor has a strong case for damages against the creditor.
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