Legal Question in Business Law in Texas

Re: Selling a business by falsifying records

Yes, false numbers where are material and which were relied upon in connection with the purchase may give rise to an action based upon fraud and misrepresentation.

Remedies: Rescission (cancel the deal get your money back), or damages without rescission. Also, possibilities exist for DPTA damages or punitive damages.

Re: Selling a business by falsifying records

False sales figures to induce the sale of a business is definitely fraud. You could move to have the contract canceled and your money returned (recission), or suit for damages, possibly an action under the Texas Deceptive Trade Practices Act ("DTPA").

Contact an attorney that handles business litigation, to see what your actual position may be, and to do some investigation of the seller to see whether a judgment would be collectible.

Re: Selling a business by falsifying records

This may be covered in the representations made in your purchase and sale agreement. If not, a fraud claim or deceptive trade practices claim may be possible. In any event this may quickly turn out to be a collection case if the seller has "run off with the money."