Legal Question in Business Law in Texas

Re: Taking over a small business who is to pay hot checks

Ordinarily a buyer of the assets of a business is not liable for the seller's debts unless he expressly agreed to assume the debts. If the seller is a corporation the corporation remains liable for the hot checks.

Although the employee is the one who made the purchase for his employer, ordinarily he will not be liable for his employer's debts. Here is a list of possible exceptions:

1. Where an employee misleads a seller to believe that the employee is the party making the purchase;

2. Where an employee makes purchases with checks which he knows are worthless; or

3. Where employee participated in some type of misrepresentation or fraud to acquire the merchandise without paying for it.

If the hot checks were given concurrently with the purchases, then it is likely that a felony has been committed. If that is the case, you will want to see the District Attorney. If the checks were merely paid on an old account, there is no offense other than a small misdemeanor.

If the seller is not broke [however the hot checks suggests the contrary], you might consider suing him in District Court or County Court-at-Law to recover the amount of the hot checks, plus attorneys' fees, interest and court costs. If some type of fraud is involved, you also may be able to recover punitive damages.

In deciding whether to file suit, you also should keep in mind whether you will be able to collect a judgment, because you cannot get to his home, his automobile, or furniture.

There are other rememdies provided by law such as reclamation of goods, etc. which are addressed by this answer.

Re: Taking over a small business who is to pay hot checks

There's no clear answer, since much depends upon the nature of the business and the terms and conditions of the sale of the business.

You could probably get the money collected under a contingency fee contract, where your costs are essentially the filing and service fees, and have a good chance that attorney fees will be included in the judgment.