What are my legal remedies ifthe seller concealed the true financial condition ofa business that I bought?
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What are my legal remedies ifthe seller concealed the true financial condition ofa business that I bought?
I purchased 3 businesses for $780,000 with seller financing. By the 4th day on 03/31/11, I discovered and “have evidence” that the business had substantially changed financially just prior to my purchasing it. The seller was fully aware hewould be taking advantage of me; he failed to disclosed material financial facts about the current financial condition of the business which guarantees that I will fail. If I miss a payment the seller is allowed to come back into the business and take over. I am out of the business, my home, and my life savings. The seller has a greater than $25M net worth. Did the seller commit fraud by not disclosing all matters relating to the financial condition of the businesses?
Asked on April 10, 2011 under Business Law, Maryland
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Prior to contracting to purchase or prior to the close of the deal? I think that you may have a case either way but the time line and the contract may be key here in how you approach the matter. I am assuming that you had an attorney review the contract and that certain issues were negotiated. I am hoping that the contract has certain representations in it that you say the seller made and that the language indicates that the representations were material parts of the contract. You need to bring the contract and the evidence you say that you have to an attorney to review on your behalf. If there was fraud or misrepresentation then you can have the contract declared voidable or void. Get help. This forum can not give you any guidance without reading the contract and knowing the time line. Good luck.
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