QUESTION
30 Days after business purchase, Non-Compliance Issues found and admitted. Seller refuses to UNWIND or COMPENSATE
Asked on Nov 05th, 2013 on Business Litigation - California
More details to this question:
I purchased a business in August 2013 for approx 1.9 million dollars. I found out after one month the company was operating without proper licenses in two states. As it stands now, if any customers find out - it would certainly cause a black mark and probable termination of our customer-vendor relationship. We are in the highly regulated mortgage industry - and ANY non-compliance is most certainly a Death-Knell. Had i known of the non-compliance issues at time of purchase, i would have never purchased the business. After one month of talking to the seller and his lawyer, they refuse to unwind the deal, or make financial consessions - EVEN AFTER admitting (In Writing) that the non-compliance did occur, since there are no damages at this time. RESULT! I am stuck with a company that i need to look over may shoulder , waiting for the day i get the knock on the door. This is not what i signed up for when i purchased the company. NON-DISCLOSURE ISSUES!
1 ANSWER
Real Estate Transactions Attorney serving Sacramento, CA
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Abdallah Law Group, P.C.
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It is true that you need to prove damages; however, it seems the seller's material misrepresentations have compromised your receiving the full benefits that you negotiated under the purchase contest. Had you known of the violations, you likely would have paid less or not purchased at all.
Also, every day that you are operating out of compliance subjects you to potential damage or injury.
I would be happy to discuss your case in detail.
Mitch Abdallah, Esq.
(916) 446-1974
Answered on Nov 07th, 2013 at 10:31 PM