Legal Question in Business Law in Colorado

Purchased a business and previous owner filing bankruptcy

We purchased a business ( just assets, inventory and name).� We got a loan for part of sales price as a down payment and the owner is carring the balance which we make monthly payments on.� According to our contract he was to pay off all of the debts of the business.� He didn't and now is filing bankruptcy.� All of those creditors - My vendors, won't give me credit because of his actions.� This has caused a hardship with the business and I don't know if we will even be able to pay rent next month.� Do I have recourse to not pay him any more money?� The attorney that wrote the contract said I should wait and see what the bankruptcy court says but everyone else says to stop paying him.


Asked on 10/10/08, 7:17 pm

1 Answer from Attorneys
Mark Cohen The Cohen Law Group, A Professional Corporation

Re: Purchased a business and previous owner filing bankruptcy

Different attorneys may offer different opinions.

It is hard to give legal advice without seeing the contract. If I understand you, the seller breached the contract, so you would arguably be justified in not paying the seller, at least to the extent the seller had not paid the creditors. You need to consult an attorney who can review the whole situation with you. Good luck.

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Answered on 10/11/08, 1:16 pm


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