Legal Question in Business Law in Illinois

Re: Business seller sued by buyer

In order to state a claim for fraud, a plaintiff must be able to allege that the defendant (your and/or your company) made a material misrepresentation of a known, present fact upon which the plaintiff justifiably relied to his detriment. Did you make any misrepresentations of known facts? If not, and assuming the justice systems works as designed, you should not have liability for fraud.

Basically, it is impossible to answer your question with any accuracy or precision in this forum. No one can perform a legal analysis of your potential exposure to liability based on the information you provided. One would need to see the Asset Purchase Agreement or Stock Purchase Agreement by which the sale presumably occurred; speak with you about the facts; review correspondence (including emails) between you and the purchaser; speak with your counsel on the transaction; try to understand the current state of the business and reasons for decline; and, in all likelihood, conduct legal research. Once completed, you should be able to be given the best picture then-available of your likely exposure, if any.

What does your counsel say who represented you in the transaction?

-- Kenneth J. Ashman; www.AshmanLawOffices.com; [email protected]

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Re: Business seller sued by buyer

It seems, from the facts you give, that you certainly "shouldn't" have to worry about any ultimate liability. The buyer "can" sue for fraud, or perhaps breach of contract or warranty, but it seems likely, accepting your point of view as true here, that any such suit would be quite vulnerable to a quick motion to dismiss. If all of your sales claims were true, and the buyer knows this, perhaps he'll claim a fraud based on your failure to disclose some material fact that, if known, would have necessarily affected his deliberations. You can think about whether he might have any basis for making such a claim.