How to get out of a commercial equipment lease with personal guarantee if you are no longer a part of the company?

Get Legal Help Today

 Secured with SHA-256 Encryption

How to get out of a commercial equipment lease with personal guarantee if you are no longer a part of the company?

I opened an Scorp with other 2 partners to do a restaurant. We applied for a lease for some restaurant equipment and they had chose my credit so I had to sign a personal guarantee being the president for the company as well. Now I sold my share of the business. The other partners own 100%. However, the leasing company doesn’t want to transfer the lease. Is there a way to get them to transfer it?

Asked on September 26, 2010 under Business Law, Colorado

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Unfortunately, there is no way to make them transfer the lease--you signed a guarantee, and they are entitled to hold you to that guarantee regardless of your position in or ownership of (or lack thereof) the business. There are things you could have done prior to selling the business, which may be more difficult now if the transaction is consummated: e.g. you could have, if the lease had an clause by which it could be paid off early (like many car leases) have had the company pay off the lease as a part  of the transaction or as a condition to you selling your share of the business; or you could have had either the company or the person who bought your shares either assume the obligation (if it could be assumed, which it likely could not have been) or at least have indeminfied you for any potential loss and/or posted a bond or reserved cash to indemnify you. You can still try to do these things, but if the deal is closed you have much less leverage.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption