Just discovered ex business owner loan unpaid! Please help!

[dylxa08310]

Here's the situation. I just bought an existing business(franchise store) from someone.(Let's say his name is A) I didn't hire a lawyer to do the store closing because of money shortage. I was running the business for a month. Then I got a call from the main office said that the ex-owner didn't pay his loan from the very first owner(say his name is B). B is 1st owner, A is 2nd owner, and I'm the 3rd owner of the store. So now everybody is looking for this A for his debt. I believe this guy is out of the country as he told me that he's going for an vacation the last time I saw him.

So do I have anything to do with his debt? I incorporated a new company before I took over. I did not buy his company. I am very worried right now. I don't know if this Mr. B gonna suit me or Mr A? I don't think Mr. B just gonna give up his money.

[CleverClogs]

Re: Just discovered ex business owner loan unpaid! Please help!

1. You are not in the United Kingdom
2. Your vocabulary suggests that you reside in the American colonies.
3. On the assumption that American company law is fundamentally similar to UK company law, neither you not your new company should have anything to fear from the first owner of the franchise - unless there is some clause in the franchise agreement that states the franchise was not the property of the second owner and hence that he could not lawfully sell it.
4. nemo dat quod non habet, as one might say...

[enquirer]

Re: Just discovered ex business owner loan unpaid! Please help!

Clarify - what is the reference to 'store closing'? You 'were running the business for a month'? What is the situation now? What happened to your company?

Start again. Is this correct?

A (1st owner) buys franchise from F (franchise company).
B (2nd owner) buys franchise from A.
C (3rd owner - you, or presumably, your new company?), buys franchise from B (or B's company? What happened to B's company?).

F now states that B owes money to A.

[charitynjw]

Re: Just discovered ex business owner loan unpaid! Please help!

According to OP's profile, Legal system non UK.

[CleverClogs]

Re: Just discovered ex business owner loan unpaid! Please help!

According to OP's profile, Legal system non UK.

Gosh!

Fancy that...

See post #2.

[dylxa08310]

Re: Just discovered ex business owner loan unpaid! Please help!

Thank you guys for replying. I reside in Canada. Plz don't laugh at me for joining an UK forum. Haha. I personally felt like I shouldn't be responsible for the ex owner's loan. Just to make it clear that I took over the business one month ago. The business is still running. I found out this ex owner's problem lately after a few companies calls for payments. He owed plumbing bills, tax payment, supplier payment and so on. So far I haven't got anybody ask me to pay for the bills. Some company told me they would just sent the bills to the collection agency over the phone.
This is the first time I own a business. There're a lot of things I have no clue what to do. I heard stories like new owner had to pay for the ex owner's debt in order to open doors. I don't know if I should be really worried about this matter. North America is sort of crazy some time. A lot of stupid things happend here.
BTW, the 1st owner called to look for the 2nd owner yesterday. I told him that the 2nd owner sold his business to me. He then said "good luck on your new business." Sounds really weird to me. I felt like "good luck on the court..."

[dylxa08310]

Re: Just discovered ex business owner loan unpaid! Please help!

Clarify - what is the reference to 'store closing'? You 'were running the business for a month'? What is the situation now? What happened to your company?

Start again. Is this correct?

A (1st owner) buys franchise from F (franchise company).
B (2nd owner) buys franchise from A.
C (3rd owner - you, or presumably, your new company?), buys franchise from B (or B's company? What happened to B's company?).

F now states that B owes money to A.

"store closing" what I meant is I didn't have a lawyer to close the deal for me. The franchisor(the main office) recommended me to find a lawyer, but I didn't. I'm still running the business now. Nothing has happened yet, but I'm a bit concerned.

In my story,
B is 1st owner.
A is 2nd owner.
A took a loan from B. A(2nd owner) is nowhere to be found now. B(1st owner) is looking for A. A is the bad guy here.
F is looking for A too. A owed food supplier money. F called me and asked where is A. F then told me the story.

[CleverClogs]

Re: Just discovered ex business owner loan unpaid! Please help!

BTW, the 1st owner called to look for the 2nd owner yesterday. I told him that the 2nd owner sold his business to me. He then said "good luck on your new business." Sounds really weird to me. I felt like "good luck on the court..."

Did he sell the business to spend more time looking for Sasquatch?

[MissFM]

Re: Just discovered ex business owner loan unpaid! Please help!

"store closing" what I meant is I didn't have a lawyer to close the deal for me. The franchisor(the main office) recommended me to find a lawyer, but I didn't. I'm still running the business now. Nothing has happened yet, but I'm a bit concerned.

In my story,
B is 1st owner.
A is 2nd owner.
A took a loan from B. A(2nd owner) is nowhere to be found now. B(1st owner) is looking for A. A is the bad guy here.
F is looking for A too. A owed food supplier money. F called me and asked where is A. F then told me the story.

Don't mean to be funny but - so....what?

You clearly have no liability in any sensible society - "A" is a bad hat, you would appear to be a blameless dupe.

[charitynjw]

Re: Just discovered ex business owner loan unpaid! Please help!

Gosh!

Fancy that...

See post #2.

The OP has now stated that he/she lives in Canada.

Canada is a bijural country, having both common law & civil law in it's legal system.

For instance, see the Quebec Act 1774.

Therefore your assumption (point 3, post #2) is................way off base?

[CleverClogs]

Re: Just discovered ex business owner loan unpaid! Please help!

Therefore your assumption (point 3, post #2) is................way off base?

Not entirely - I'd merely made a slight error over the colonial province involved.

[dylxa08310]

Re: Just discovered ex business owner loan unpaid! Please help!

Don't mean to be funny but - so....what?

You clearly have no liability in any sensible society - "A" is a bad hat, you would appear to be a blameless dupe.

"You clearly have no liability." This is what I wanna hear right now. It sounds beautiful. The main office people told me that they don't know what's gonna happen. They were saying that the food supplier may stop delivering to me becuase the balance the 2nd owner (A) owed. It doesn't make any sense. I'm not the one who owed the money. It's not under the same company name anymore. Why would the supplier punish me for others' debt? The old main office lady kept telling me that "this is why you should get a lawyer. None of these would happen if you did what we asked. " It' s like they tried to make things complicated for me.