geoff I'm genuinely not trying to rile you here but you need to wake up, debt recovery and litigation (potentially ) are not fun but losing a bucket load of cash is a hell of a lot worse. yes you talked to your lawyer from the start. as terry, myself and from memory at least 1 other person stateD it sounds like your lawyer isn't all that good because he/she didn't protect you well enough from the beginning. just go get a 2nd or 3rd opinion, you have nothing to lose and everything to gain. if the 2nd lawyer advises you to do the same things as your lawyer then you know you're probably on the right track. if they advise you something completely different or point out some thing major that has been missed at least you can give yourself the chance to fix or change it. as it stands there are too many unknowns. if you are finding it too stressful to handle then it's all the more important that the people you appoint to sort it out are extremely competent. Anyway I'll leave you to it and do genuinely wish you the best. having been involved in disputes and litigation it is not a lot of fun, especially when you are the one feeling aggrieved because the other party dropped the ball.hope you get a good result.
what security do you have on his property? caveat? 2nd mortgage? how much is the property worth in the sense is it going to help a lot compared to the amount he owes you and is it mortgaged?
Vendor finance for the sale of a business some interesting potential steps/measures here, I have only skim read but does show the level of control possible if written into the vendor finsncr agreement. worth someone reading/considering if they are looking to enter into an agreement of this nature now or in the future. I think deed of priority and power of attorney alone, as well as no/limited profits being distributed until debt repaid would leave the vendor in a much stronger position.
The lawyer had actually protected me well in the beginning- better than I realised. I had thought that the original agreement was by personal guarantee- however it is backed up by two businesses plus personal assets. However this may not help. The two businesses have lost a lot in value since he bought them. This is in addition to him losing a third business due to a lease not being renewed. He seems to have been at pains to protect his personal assets. If it goes to bankruptcy there may be some winding back involved. I know that he did own a number of businesses which he has now sold; I wouldn't be surprised to see a fat super balance. There was a report that he had a leased BMW. I'm not sure of the nature. The contract says: .Charge over each of two companies .Charge and/or mortgage over his assets .Charge over the business I sold and charge over another similar business (which was sold without a vendor finance agreement).
has a charge actually been placed? i know it's common for contracts to say etc "the buyer / vendor has the right to place a caveat/2nd mortgage over the property" but you actually have to go and register it with the land titles office best to do this at the beginning.
But were any of the charges registered? Mortgages over properties and Property Property Security Act registrations over non real property. Without registration you will lose priority.
This topic covers priorities of unregistered mortgages: Legal Tip 115: The Gift and Borrow Back Strategy, Part 1
Just a thought, if he goes into voluntary administration, could you offer to buy the business back at the reduced rate?
he has a charge over the business and should be listed as having the 1st mortgage, there woild be no need to buy it because it already should be his tbh.
This would be a nightmare scenario. I was so glad to claim back some of my life when I sold. My marriage would not have survived another year. Possibly not my liver either.
The person bringing the claim against the other person has asked me if there is a way we can collaborate on the matter. Is this something worth considering?
Was there a clause in the VF that allowed you to take back the Business if he/she defaulted on the loan?
The business is a part of the security for the loan, along with another of his businesses. However: 1. The business has dropped in value- due to a general downward trend in sales 2. He paid above the odds to get the vendor finance anyway. 3. Bank has first dibs. They lent him the other amount. 4. I really don't want to be running the business again. So I might be able to get some money back after the bank is paid off, if the business was sold (in a fire sale); but it would be a lot less than even what it was worth when I sold. In a bankruptcy, there's other debts, not just mine- and I would be way down the list. But I couldn't just take over. The bank would have to be paid off first.
The person bringing the proceedings against him had already entered into a vendor finance agreement with him for another store in the system. The lease in that store was not renewed, so he lost everything. That person has already been in contact with the franchising organisation, and they don't want to be involved whatsoever. That's the person who is talking cooperation.
If they don't trade through this the likelihood is there will be nothing left anyway. We have a bit of a similar situation where the money was paid because of guarantees etc but then three years later the liquidator is treating these as "preferential payments" that need to be paid back (for the 6 months prior to insolvency). So - even if you do get your payments you may not get to keep them. There is a reason why you get extras for vendor finance.
