Legal Question in Business Law in Virginia

Re: business sold and taken over

I think that you need to know more information about how the new owner "took over" the business. However, I think you have reasonable grounds for bringing a lawsuit, precisely becuase you probably will not be able to find out exactly what happened other than starting a lawsuit and getting some official response and perhaps some discovery (Although in general district court there is very limited discovery available).

A letter demanding any proof as to why they don't owe the money is always possible and is always a good idea before filing a lawsuit. Ask them to prove it, because if they don't answer with any reply, you clearly had good reason to file a lawsuit. Save a copy of the letter to show that you tried to work it out and asked them to explain why the new owner does not owe the money (beyond his mere opinion or sophistry).

Of course don't fall for every "line" they give you in response. Their explantion needs to be carefully analyzed. But if they can't prove to you that the new owner doesn't owe the money, then go to court and let the judge resolve the dispute.

In general, the normal rule would be as my colleague states. YES, the new owner would continue to run the business and would continue to be responsible for unfinished transactions of the business he took over. There would have to be some exception to this general rule, some specific reason WHY the new owner is not resposnible for the old owner's contracts and agreements. In other words, one of the meanings of taking over a business is to ASSUME all of its contracts. Thus, by definition, taking over the customers and contracts of the business is what it means to take over a business.

For one thing, the new owner's response is a red herring. You are not asking the new owner to pay the debts of the old owner. You hold a contract with the business to deliver furniture. You have an unfinished transaction with the business. You are not the phone company or the electric company with an old debt. You are a CUSTOMER of the BUSINESS with an open transaction that has not been completed. This is a different situation, because when the new owner "took over" the business, he took over the customers and contracts of the Business... including you and your unfinished contract.

So do not allow him to say your situation is a "debt" of the old owner. You have a contract with THE BUSINESS to deliver you furniture, and if the business does not, you can sue them.

However, you said that the new owner did not buy the business. Therefore, I don't know what process caused the new owner to come into possession of the business, or what happened to the cash held by the business (since you gave them cash), etc., etc. The transition would be extremely important to know if some exception applies.

Also, we would like to know if the business was a corporation or a sole proprietorship or what.

Also, why are you assuming that you cannot sue the old owner?

Re: business sold and taken over

Absolutey, unless there is an agreement to the contrary, the new owner is responsible for the debts of the business he has purchased.