Legal Question in Business Law in Ohio

SBA Disaster Relief Loan

Following 9/11, my husband's aviation business received a SBA Disaster Relief loan. All 3 partners (and spouses) were required to personally guarantee the loan, but the collatoral was the airplanes and business assets. In 10/96, my husband was forced out of the business by the other 2 partners because he wouldn't sign a non-compete clause. *(On the advice of counsel, we formally turned in our shares to completely remove us from the business.) The majority partner then fired the remaining partner leaving him with the business and all the assets. A couple months ago, we received a notice from the SBA that the loan was in default. The remaining owner, in the meantime said he ''sold'' all the assets that covered the loan to a new company. He put a former low-level employee as the ''new owner'' renamed the business and is operating in the same location, with the same employees and the same assets (which covered the loan). He refuses to use them for the loan because ''he sold them'' although he recently sold an airplane registered to the new company to settle another of the previous company's debt. For 2 months, we have been trying to contact the SBA, but they don't respond. We're desparate and running out of time. Please help!


Asked on 2/07/08, 9:57 am

3 Answers from Attorneys
Jamie Schneier Petronzio Schneier Co., LPA

Re: SBA Disaster Relief Loan

I would suggest you talk to a local business or creditor's rights attorney as soon as possible. You should move on this quickly to preserve any rights you have and avoid any negative effect on your personal credit. From the facts you provided, you have potential claims or rights against the business or partner that transferred the assets. The transferred assets and or successor business might still be subject to liens covering the loan or improper transfer or successor arguments. There is more here as well that could be looked at by an attorney, but they would need more facts and documents to review.

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Answered on 2/07/08, 11:39 am
Michael Brandabur Brandabur Law, LLC

Re: SBA Disaster Relief Loan

By chance, did you encumber the assets (the aircraft) with any type of lien or UCC filing? When you sold your shares, I presume you didn't get a release from the SBA loan. However, is there anything in those documents that may help you, such as an indemnification agreement? In short, you need to consult with an attorney experienced in litigation.

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Answered on 2/07/08, 9:02 pm
Robert Rosplock Rosplock & Perez

Re: SBA Disaster Relief Loan

This issue is too complex to deal with this way. You need to contact a good business litigator ASAP before the rest of the assets disappear. The lender has every right to collect the old loan from you and your spouse.

PS: With proper advice when the business was set up, you may not be in this spot. There is no worse position to be in than that of a minority shareholder in a privately held company without an agreement obligating of the company or other shareholder(s) to purchase your shares if you die or leave, especially involuntarily.

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Answered on 2/07/08, 10:58 am


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