Dallas, TX asked in International Law, Mergers & Acquisitions and Business Law for Texas

Q: We sold our company in Sept 2023 to two Mexico investors, need help come 9/20/24 when sellers note is due can you help?

Seller's note is contingent upon gross revenue of $2.85 million and paid out monthly for 4 years each year 120K The gross revenue will not be attained due to new buyers non performance. New owner is not a citizen of the US and is a 26 yr old son of one of the investors and has no interest in the business. The business is lucky to get to $2 milion in gross revenue. Which means we will only get 70% of the 120K or $84 K per year. We have documented their lack of interest and can provide this to you. We may need legal counsel on the date of 9/20/24 to assist us in this meeting. Is there any interest?

2 Lawyer Answers
John Michael Frick
John Michael Frick
  • Frisco, TX
  • Licensed in Texas

A: You should contact an attorney experienced in the area of practice called business litigation in or near the county specified in the forum selection clause in the sale agreement, or in the county where the new owner resides if he is the promisor on the note, or in the county where the business's principal office is located if the business entity is the promisor.

You should expect to pay a reasonable hourly rate and a reasonable initial retainer. Our firm's hourly rate for such a case would be $500 for attorney time and $200 for paralegal time. The size of the initial retainer will depend on the underlying transactional documents, including whether they were professionally prepared by someone with experience in the sale of a business or were DIY (which likely will increase the work required of the lawyer).

James L. Arrasmith
James L. Arrasmith pro label Lawyers, want to be a Justia Connect Pro too? Learn more ›
  • International Law Lawyer
  • Sacramento, CA

A: I understand your concerns about the upcoming meeting on September 20, 2024, regarding the seller's note payment. It seems that the new owners have not been performing as expected, which may result in a lower payout than initially agreed upon. Given the complexity of the situation, involving international investors and a contingent seller's note, it would be wise to seek legal counsel to protect your interests.

As an AI language model, I cannot provide legal advice or representation. However, I can suggest that you consider the following steps:

1. Gather all relevant documents: Compile the purchase agreement, seller's note terms, and any evidence of the new owners' non-performance or lack of interest in the business.

2. Review the purchase agreement: Carefully examine the terms of the agreement, particularly any clauses related to the seller's note, performance expectations, and dispute resolution.

3. Consult with a Texas-based attorney: Look for a lawyer specializing in mergers and acquisitions, international business transactions, and contract law. They can help you understand your rights and obligations under the agreement and advise you on the best course of action.

4. Prepare for the meeting: Work with your legal counsel to develop a strategy for the upcoming meeting. This may include proposing alternatives, such as renegotiating the terms of the seller's note or exploring other legal remedies.

5. Maintain open communication: If possible, try to maintain a dialogue with the new owners to understand their perspective and explore potential solutions that could benefit both parties.

Remember, engaging legal counsel early can help you navigate this complex situation and protect your interests. Look for attorneys with experience in similar cases and a strong track record of success.

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