Legal Question in Business Law in Illinois

Selling a small business
I sold my small business approximately 6 months ago. During the negotiations for the sale of the business, I told the buyer that the business had a few minor debts, but because they were intermingled with some personal debts, I didn't want to disclose all of them. I told the buyer that all of the business debts were going to be paid with the money received from the sale, which is what happened.

Now, 6 months later, the business is not doing as well, and the buyer is threatening suit due to my failure to disclose the debts in the financial statements. In my opinion, the debts didn't affect the profitability of the company, they were orally disclosed during negotiations, and they were paid off immediately after the sale.

Does she have a case for fraud? How hard is it going to be for her to show damages when the debts were never transferred to her, and were paid off immediately after the sale? Are there any other issues that I should be concerned with?

Thank you in advance for you help.

Asked on 12/03/07, 7:05 pm

Joseph Michelotti Michelotti & Associates, Ltd.

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Re: Selling a small business

The real issue is whether she will sue you or not. Anybody with $300.00 can sue you.

If she does sue you can she be successful is the second question.

If the financial statements were not accurate she might have an argument.

You really need to contact an attorney.

email me if you have any questions

Answered on 12/03/07, 11:00 pm

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