Legal Question in Business Law in Pennsylvania

Selling a restaurant

My husband and I own a restaurant that we are trying to sell. In short, when we purchased the restaurant my husband was not entirely forthcoming to me about his financing. When we do sell, how do I protect myself? I want to avoid restaurant debts becoming our personal debts. Prior to selling, I would like a legal agreement to exist between he and I that he will ensure that all of his debts are paid within a reasonable time after closing. Something that would require complete disclosure. Is something like that possible? What area of law would that be?


Asked on 1/25/07, 10:15 pm

1 Answer from Attorneys
Marc V. Taiani AAAL - Allegheny Attorneys At Law

Re: Selling a restaurant

You are mistaking two different types of debt...first when you sell property any debt that can attach to the property MUST BE PAID OFF IN ADVANCE. This is why you need to hire a Settlement Company / Title Agency to do the work. As long as the buyer purchases title insurance on the property or rather you purchase title insurance on the property for the purchaser you will be protected. This includes debts from any real estate taxes (school, county, local real estate taxes) water, and sewage bills as well.

In regards to the business debts, as long as your husband's restaurant is incorporated and he didn't sign off on any personal guarantees you should be fine. If you are not sure about this...then take a percentage of the proceeds and place them in an escrow account to protect any later claims.

In other words hire an attorney, now or risk signicant debt later.

My office handles settlement procedures and real estate matters. Please feel free to contact my office at your convenience.

Sincerely,

Marc V. Taiani, Esquire

412.731.0865

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Answered on 1/26/07, 7:58 am


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