Legal Question in Business Law in California

Illegal sale of business

In 2001 I sold my accredited school for $250.000 payable over a 15 year period with a one year delay in payments. The new owner let the accreditation lapse. A year later the new owner decided to go for accreditation again and because the audit would not be profitable, I agreed to lower the price by $100,000. Only two payments (interest only) were received in the next year. The owner insisted he had no money to pay. I heard from a friend that the owner was going to shut down the school the following week. I called and was informed he had placed it with a broker, taken the first offer and sold the school for about what he owes me. He now refuses to give me any of the money unless I cut him in on it. What are my options? This person is my brother.


Asked on 6/18/03, 2:50 pm

5 Answers from Attorneys
Frederick Choi Law Offices of Frederick H. Choi

Re: Illegal sale of business

The limited facts may indicate that you have a claim and the ability to take immediate action to which could include placing a lien on the business in order to preserve any equity. However, a good deal depends on if there was a written agreement for the purchase, and the potential issues with the family relationship. I believe that it is important for you to contact an attorney to help you sort through the matter so as to avoid a major financial loss. If you are in the area and would like further consultation, please do not hesitate to contact our office.

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Answered on 6/18/03, 3:03 pm
OCEAN BEACH ASSOCIATES OCEAN BEACH ASSOCIATES

Re: Illegal sale of business

It appears to me that you had a valid contract for sale and that your brother is in breach. Contact me immediately before you devalue your case at (619) 222-3504.

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Answered on 6/18/03, 3:57 pm

Re: Illegal sale of business

First, we don't know that the sale was "illegal" unless the contract prohibited a sale. Was there a written promissory note in relation to the sale? Was the promissory note secured by any property such as the school? Was there a UCC filing? (If you said what's a UCC filing, there probably wasn't one. I can explain what it is if you like).

There are a lot of unknowns in your situation. I have to review the contract and discuss the situation with you. I can tell that there's already a huge rift between you and your brother. However, you must decide how far you are willing to take this. There is a significant amount of money involved. But, do you want to burn the bridge forever?

I would be happy to discuss this matter with you.

J. Caleb Donner

DONNER & DONNER

LEGAL WARRRIORS (R)

325 E. Hillcrest Drive, Suite 242

Thousand Oaks, CA 91360

Tel: 805-494-6557

Fax: 805-494-0990

email: [email protected]

website: www.legalwarriors.com

DISCLAIMER

This reply constitutes legal information for education purposes and does NOT constitute legal advice nor establish an attorney-client relationship. We will only represent you based on a written retainer agreement. Therefore, you should contact this office to discuss representation if you do want legal advice/representation.

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Answered on 6/18/03, 4:35 pm
H.M. Torrey The Law Offices of H.M. Torrey

Re: Illegal sale of business

from the facts given so far, you appear to have a very strong breach of contract cause of action against your brother. of course, being family, it should be approached with more understanding and negotiations than if it were some random 3rd party. if you would like such conscientious legal assistance in this matter, feel free to email me directly with how you might like to proceed. best wishes in getting this resolved amicably.

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Answered on 6/18/03, 5:02 pm
Michael Olden Law Offices of Michael A. Olden

Re: Illegal sale of business

I have read the other reply is given to you in mind would be very much the same is theirs. With a brother like you have who needs enemies. You have numerous rights against both he and to possibly tie at the proceeds to the sale of the school. This depends upon numbers of details in terms of the agreement, the security hopefully taken for the payment, the timing at this point of all transactions and many other factors. I am in Northern California and would very much like to speak with you about the situation. If you wish my phone numbers 95 � 376 � 1951 and you can read my profile in this web site. I hope this tells you that you need a commercial business attorney immediately to deal with this situation and protect your assets.

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Answered on 6/18/03, 6:46 pm


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