Legal Question in Business Law in Tennessee

factoring recieveables contracts

we have been factoring with this company for 9 years.we had another corporation that was a brokerage it went out of business at that time it owed the factoring co. 80,000.00 we were informed that we had to pay it back even though it was a seperate corporation so we did. All of it over a period of time. we ask for a line of credit after paying it back. we requesed 10,000.00 or anything. They told us we had an IRS lien. We have had since 5yrs ago.They have been holding our reserve ever since we told them that the IRS said it was uncollectable at this time. They have demanded we get something in writing from the IRS. I went down to the IRS office. They said the case was closed for now.I can't get a letter.Now they have told us our account will be closed as of march they are canceling our contract with them.due to the lien with the IRS it was the decieding factor.They are still holding our reserve. Can they do this? Do they have a legal right to do this?This is what you get for being a loyal customer. I don't understand.There should be laws to protect us from things like this. We will be put out of buisness if they do this to us.we have struggled to stay in business due to them holding our reserve we have got behind on our obligation


Asked on 2/28/05, 6:19 pm

1 Answer from Attorneys
Autry Jones Jones & Landers, Attorneys At Law

Re: factoring recieveables contracts

If I understand you correctly, the facoring co. is holding your funds that you don't owe them. You want to know if they can do that. It depends on the agreement you signed. I'd contact an attorney immediately to: 1) determine whether your money is being held illegally; and 2) to look into the IRS matter, to prevent this being a problem for you in the future.

Read more
Answered on 3/01/05, 9:49 pm


Related Questions & Answers

More Business Law questions and answers in Tennessee