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Any sale of business experts out there?

(12 Posts)
BibiThree Wed 14-Nov-12 10:51:52

I am shaking I'm so upset. My gran sold her late husband's business to her son, I was with her at the signing of the contract and she specified all profits and debts were to be transferred on sale so she wouldn't be liable for any, which she was particularly anxious about. She died a week later and I'm executor of the will. Her son has been running the business since her husband died 6 years ago and she's seen no profit from it since, he's handled all the money, but now he's chasing me for £17,000 debt from the money he gave her for the sale. He only paid half the value £30,000) as he was gifted the other half anyway.
I have said that he has profited from the business for the past 6 years and is entitled to the money in the business account, which he can have once I get grant of probate as it's frozen at the moment, but I don't think he's entitled to any money my gran had at her house, (possible profit from before ym Dad's death, but as it's in cash I don't know) or any money out of what he paid for the business.

Can anyone help? He's getting aggressive with me, saying he's going to take me to court etc.

mycatlikestwiglets Wed 14-Nov-12 11:00:33

It isn't entirely clear from your post on what basis he claims to be entitled to the £17,000? Also, if the business sale was done properly the business account should have passed to the son with the business itself, rather than now being part of your gran's estate, which makes me think that perhaps the whole thing wasn't done in the way your gran seems to have understood. Do you have a copy of the business transfer agreement? That should make clear exactly what was transferred and when.

Anyway, it sounds as though you really need proper legal advice so I would recommend running this past a solicitor.

BibiThree Wed 14-Nov-12 12:20:10

Thanks for replying. He has set up his own business account but My gran waas keeping hers open for a few weeks to tie up loose ends, direct debits coming out etc. debits came out etc. Like I say, she died very quickly after the sale, within a couple of weeks, but I'm hopefully seeing the solicitor who dealt with the sale tomorrow.

He is saying the £17,000 was part of debt to a supplier which he claims goes back to before my Dad died 6 years ago, so now he owns it he shouldn't have to pay it. BUT my Gran was very clear that as he'd be buying the business as a going concern and that he'd seen all the profits from it for the last 6 years not her, that he take on everything, including all profits (which he has had no trouble in accepting) and including debts which he has played a part in creating.

He now seems to think I have to pay this out of her estate, namely the £30,000 he gave her. I hope the god the solicitor did this correctly.

dinkystinky Wed 14-Nov-12 12:22:31

BibiThree - you need to speak to the solicitor. The business transfer agreement should be clear on what was and was not transferred to him - and it should reflect what your nan said. If he sues you, he'd have to be able to prove to a court that the debt was pre-sale debt and that it was agreed the seller would bear the cost of it.

mycatlikestwiglets Wed 14-Nov-12 13:23:10

If the debt is over six years old it may no longer be payable in any event so it sounds like he could be trying to pull a fast one. The business sale agreement will (or certainly should) set out the position on all pre-existing debts so try not to worry until you've taken legal advice.

If the solicitor confirms this sum is payable, ask for a copy of the solicitor's original letter of instruction along with the file in relation to the sale. If the arrangement was meant to operate the way you think, it should be recorded in there somewhere and you may have a case against the solicitor (on behalf of your gran's estate) if they have messed up.

BibiThree Wed 14-Nov-12 13:29:17

Thanks all. He's saying now the solicitor has got it wrong and that my Gran had agreed with him before hs died to pay this debt. If that was the case, why did she specifically ask the solicitor to make sure she wasn't liable for any debts and why didn't she tell me of this, knowing I'm the sole executor.

I'm so worried.

BibiThree Wed 14-Nov-12 13:35:53

I feel physically sick at the thought of this piggish, aggressive man trying to bully me. He has always had issue with me and my brother benefitting from the will, but we were raised by our grandparents and they wanted to provide for us. It's not much, but why should her wishes be ignored to pay off debts he hasn't managed int he 6 years he's been running the business.

Also, is it usual for a supplier (of car tyres) to first allow someone to build up a debt of £25,000 which he says it was 6 years ago, and second allow that debt to continue over a 6 year period for a small back-street tyre garage?

dinkystinky Wed 14-Nov-12 13:51:31

The Business Transfer Agreement should have an entire agreement clause - if it does, he really doesnt have a leg to stand on! Please do speak to the original solicitor who acted on it.

mycatlikestwiglets Wed 14-Nov-12 13:58:24

^^ what dinkystinky said. Even if it doesn't, it's unlikely his version of events would be upheld by the courts if the solicitor is clear about your gran's wishes. The fact he's changed his story is another indication of this being a try on.

As I said previously, a debt more than six years old may not now be enforceable, and it does sound odd in the circumstances you describe. Hold firm and try not to worry about this. I would suggest you tell him that you're unwilling to enter into further discussions with him about this as it's a matter for the solicitor.

dinkystinky Wed 14-Nov-12 14:17:49

The burden of proof, in any event, of PROVING that your gran agreed differently would be on this idiot too OP. But please do speak to your solicitor - they'll dig up the files and see what their records, and the contract, say - and will hopefully put your mind at rest and help you get rid of this chancer.

BibiThree Wed 14-Nov-12 14:21:34

I sent him a message saying that this wasn't what I believed the agreement to be, nor what my Gran believed, but that I would speak to the solicitor and proceed from there.

I don't want to be unreasonable, I just won't pay a debt that she didn't want to be liable for.

It is a complete try on, he's been conning her for years. Thank you all for being so reassuring. They are also saying money she had in her safe from before my Dad died is now their money and that there was more than £17k there. There was £4k when I checked, so they think she must have spent it. I don't think she could have spent it, she was elderly and literally only went to a bingo game on a Monday, the Post Office on a Wednesday and Asda on a Saturday. Never used her debit card and lived quite a frugal life.

dinkystinky Wed 14-Nov-12 14:40:39

Do not engage with these people OP - keep a record/diary of all their frankly insane requests and go via solicitors if need be.

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