My brother let his boss borrow 125000 dollars as a loan payable and he didn’t pay it back.
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
My brother let his boss borrow 125000 dollars as a loan payable and he didn’t pay it back.
So my brother works as a controller in a pool company. He lend 125,000 Dollars of my dad’s money to his boss and there was a contract where he would pay it back with 6 interest monthly for 5 years. And there were other conditions in the contract where he would pay him 20,000 on every million the company makes. Unfortunately, none of this happened. The company was later sold to a new owner for a quarter of the money. Now I’m not sure whether that ruins the chance of getting the money. If we were to sue him nobody knows what assets he has remaining to take it from him. I am foreign so I don’t know much. But there is a whole contract with a lawyer which states these conditions. Can someone please give me a rough overview on what can be done in order to take that money back. Note The new owner doesn’t really want to pay it back. He has set performance based incentives which my brother is trying to justify getting it back. I know its an extremely stupid situation and I warned him but now I still feel like something can be done.
Asked on March 2, 2018 under Business Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
1) The new owner of the company would NOT be liable or responsible for the loan if the new owner did not sign the loan agreement, unless a) the company was a corporation or LLC, b) the loan was not to the boss personally, but was to the corporation or LLC, *and* c) in buying the company, the owner bought the corporation or LLC (and not just its assets. If ALL those conditions are met, the company--not the new owner personally; the corporation or LLC--remains liable. But if the loan was to the old boss personally, only he is liable.
2) Your brother could sue his old boss for the money: he would sue for breach of contract, or violating the terms of the loan agreement, which is a contract. While as you point out, if the boss doesn't have sufficient assets to cover the debt, your brother may not get his money back, there is not necessarily any reason to think that he does not at this point (and after all--if he sold his company, presumably he received some amount of money for it), and in the course of the lawsuit, there are legal mechanisms ("discovery") to get information about the boss's assets. So the thing to do is sue for the money. For $125,000 (at least, since that is the principal; more with interest, etc.), it would be worthwhile for your brother to retain an attorney to help him.
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.