Legal Question in Credit and Debt Law in Virginia

Well, on the up side, there was always the possibility that they could have gone bankrupt or out of busienss. At least if they are selling the business they should be receiving payment from the new buyer. Perhaps they have a lump sum of money.

If the contract does not require "acceleration" of the monthly payments on the sale of the business, then the first buyer can continue to make the same monthly payments. The buyer of the business owns it as his property and can do anything he wants with it, including re-selling it. If the contract is silent on the question, then the first buyer can continue to make the payments under the contract as before.

To make these payments, he can ask someone else to deliver the money to you. So the 2nd buyer can make the payments. HOWEVER, THE 1ST BUYER REMAINS RESPONSIBLE. Having the 2nd buyer make the payments to you does not change the 1st buyer's responsibility to make the payments or make sure they are paid by someone.

However, if the contract was written by an attorney or copied from a form contract or copied from a serious sale-of-business contract it PROBABLY includes provisions giving the original seller a "security interest" in the busienss and/or in the inventory or property of the busienss.

If there is any language at all in the contract about any security interest or collateral or a lien or anything of this sort, then the 1st buyer COULD NOT sell the business free and clear to the 2nd buyer. The 2nd buyer could not receive clear title to the business and/or property and inventory.

This is the reason why such paymetns are normally paid in full at the time of sale. The new buyer wants 100% ownership of the business without any restriction.

I am not sure that the original seller could block the sale. Possibly yes. But if there is a security interest or collateral rights in the business, the original seller would CONTINUE to hold a security interest or rights of collateral in the business and/or its property.

The theory on this is that the 1st buyer cannot sell more than the 1st buyer owns. The 2nd buyer cannot receive the business free and clear, because the 1st buyer did not have the right to sell the busienss free of the security interest (if any). So the 2nd buyer would receive the business subject to the security interest (if any). The 2nd buyer can only receive what the 1st buyer owns (which is subject to the security interest).