Legal Question in Civil Litigation in Utah

A loan made to a company.

If I loaned a company money and the owners sold the company without disclosing the debt they owed me. Is the owner liable or is the new buyer of the company responsible for the debt. The seller was in Utah, the buyer was in New York.


Asked on 10/18/07, 9:06 pm

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: A loan made to a company.

It depends. If you obtained some form of recorded security in company assets such as a mortgage, title lien, or filed UCC-1, the new company is liable. If the seller secreted the loan, he is clearly liable for the debt. The buyer needs to have some form of notice. It is like buying a house. A buyer has the title company search for recorded mortgages and liens, and the purchase is subject to these recordings. If a lender failed to record its lien, the house buyer is not obligated to pay the note. If you did not record something, or provide notice to the buyer, the buyer is probably not liable.

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Answered on 10/19/07, 10:41 am


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