Legal Question in Business Law in New York
We owned a business in NYC. We are surrendering the business to the original seller as we have a note with him. He has found someone willing to assume the note and lease and release us from our note and lease. However there are 2 financial liens on the business which we personally guaranteed. What happens to the liens with the business? Does the former owner get the business back free and clear if we go out of business?
2 Answers from Attorneys
You have to divulge the information and come to agreement with the original seller and the new buyer regarding the outstanding liens. You do not want loose ends and problems to rebound in the future for it will be costly in time and attorney's fees and your personal guarantee is still standing and valid into the future.
It depends. If the business is now encumbered then whoever it transfers to is so encumbered at least to the extent that the lien is filed against that business. If you personally guaranteed these obligations then you are still on the hook unless that creditor releases you, which is doubtful.
If, however, the owner is merely taking back the assets of the business, not the subject of the liens, then it would appear that only you personally and perhaps your entity would be liable.
You should make sure to be transparent regards to any creditors or liens and I suggest consulting a lawyer in private if you have concerns about this.
If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.
Kind regards,
Frank
www.LanternLegal.com
866-871-8655
DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
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