[PenultimateManStanding]

I talked today with the old owners of the Italian restaraunt where I worked for ten years. They are good people, foibles and all, which you know about if you've followed my posts on this. I told them how I'm making $200 a day teaching a high school intersession for three weeks which is good money for me. The wife told me that she passed the Real Estate exam the second time around. The husband is slated to start work at a casino. He told me some other stuff that's quite interesting. There was an eviction notice on the establishment that said the current owner must leave by Oct 3. But the landlord gave a key to the old owner, who is tied to the place by a guarantee on the bank loan to the tune of one hundred thousand dollars. The old owner then changed the locks. He's calling people up to see if he can get them all to work again at the place, but nobody wants to go back there. They've all moved on and there are no employees. Here's the question: if the current owner has until Oct 3 to vacate, why is the landlord giving the key to the old owner and is that legal? The locks were changed by the old owner. But he isn't the owner of the establishment now. Though he is the guarantor of the bank loan, he isn't the owner. Is there a law suit in this?

[Doly]

$this->bbcode_second_pass_quote('PenultimateManStanding', 'H')ere's the question: if the current owner has until Oct 3 to vacate, why is the landlord giving the key to the old owner and is that legal? The locks were changed by the old owner. But he isn't the owner of the establishment now. Though he is the guarantor of the bank loan, he isn't the owner. Is there a law suit in this?

[smallpoxgirl]

$this->bbcode_second_pass_quote('PenultimateManStanding', ' ')Here's the question: if the current owner has until Oct 3 to vacate, why is the landlord giving the key to the old owner and is that legal?

[PenultimateManStanding]

There are three parties: the old owner who sold the business to the current owner about three years ago. The old owner needed a couple hundred thousand for other purposes and so he signed as the gaurantor of the bank loan to the new owner. Then there is the owner of the building from whom the business leases the space. The new/current owner owns the equipment inside the place of buiness which is slated to be sold as part of a bankrupcy proceeding. The old owner believes that becasue the new owner is no longer running the business and that he is the guarnator of the bank loan, that he will simply start up the business anew. However, he is not the current owner, so the equipment inside doesn't belong to him and he has no right to assume possession. Nonetheless, even though the landlord put up the notice to vacate by Oct 3 which follows notification to the current owner of court proceedings to evict some three or four weeks ago, he then turned around and gave the keys to the old owner who then changed the locks, a couple weeks prior to the eviction date. It all seems very strange to me. More news from the restaraunt indeed. This last chapter may turn out to be very interesting. The place shall remain unnamed, as well as the parties being given generic names, "old owner" etc.

[smallpoxgirl]

$this->bbcode_second_pass_quote('PenultimateManStanding', ' ')The old owner needed a couple hundred thousand for other purposes and so he signed as the gaurantor of the bank loan to the new owner.

[PenultimateManStanding]

$this->bbcode_second_pass_quote('smallpoxgirl', '')$this->bbcode_second_pass_quote('PenultimateManStanding', ' ')The old owner needed a couple hundred thousand for other purposes and so he signed as the gaurantor of the bank loan to the new owner.

[duke3522]

I would say a lot has to do with where the ‘new owners’ are at and what is their financial situation. If the new owners are no where to be found, or are completely broke, then pretty much anything goes because the new owners are not around to complain.

Next, I would want to know if the loan the old owner guaranteed was collateralized by the equipment. If so, then the old owner has every right to move in and use the equipment in an attempt to get the loan current. If the equipment was used as collateral in any loan other than the one the old owner guaranteed then the equipment will end up going to the holder of that loan.

Like I said before, if the business has been abandoned by the new owners, the old owner has every right to try and save the business in order to service the outstanding loan.

[PenultimateManStanding]

$this->bbcode_second_pass_quote('duke3522', 'I') would say a lot has to do with where the ‘new owners’ are at and what is their financial situation. If the new owners are no where to be found, or are completely broke, then pretty much anything goes because the new owners are not around to complain.

Next, I would want to know if the loan the old owner guaranteed was collateralized by the equipment. If so, then the old owner has every right to move in and use the equipment in an attempt to get the loan current. If the equipment was used as collateral in any loan other than the one the old owner guaranteed then the equipment will end up going to the holder of that loan.

Like I said before, if the business has been abandoned by the new owners, the old owner has every right to try and save the business in order to service the outstanding loan.

[duke3522]

Hey PMS,

I have always found your posts on this subject interesting. Gives those that have little or no self employment experience a little taste of the small business world.

Sounds like to me that since the mall moved in there is little of value left in that business. To bad for the old owner who most likely is going to get stuck paying off that loan with little, if any, chance to recoup their money.

But this is why small businesses like that seldom last for more than a generation or two. When the business is sold the new owners have a tough time paying all the regular bills plus the loan to buy the business. Happens around here all the time.

duke

[PenultimateManStanding]

$this->bbcode_second_pass_quote('duke3522', ' ') To bad for the old owner who most likely is going to get stuck paying off that loan with little, if any, chance to recoup their money.

[PenultimateManStanding]

Weird. The old owner called me on the phone today asking me if I would go back to work there. He's going to open the place up this Wednesday, he tells me. But this Wednesday, the current owner is signing the papers so the trustee can auction off all the stuff inside the place. Those big industrial dough mixer/cheese graters go for more than ten grand. There's over fifty grand worth of stuff in there. I really think the old owner should be talking to the current owner about this. It seems he's paid off the old debts to the PennySaver mailer so he can advertise. But the current owner cancelled the phone service today so all the advertisements will have the wrong phone number. In fact, they will have a number that has been disconnected. Comedy of errors. I realy wonder how this is all going to play out.