CCJ Issued against company for debt from previous ownership
Discussion
Looking for a bit of advice.
We purchased a company in Nov 07 and have just received notification that a CCJ was issued against it last week. Having spoken to the court and then the solicitor for the claimant, the debt was accrued prior to us purchasing the business.
We have no knowledge of the supplier or the services suppied. I'm obviously keen to get this resolved asap in order to have the CCJ removed from the company record.
The claimants solicitor has asked me to confirm these facts in writing and they will then go back to their client which I have done.
Can anyone give me any advice on what the next course of action should be? I don't want a CCJ registered against the business, however don't wish to pay a debt that isn't ours.
Due diligence was carried out at the tme of the sale and a clause is included in the deed of sale confirming that there were no outstanding debts. The value of the debt is a few hunderd pounds (slightly inflated due to costs now).
Good advice greatly appreciated!
We purchased a company in Nov 07 and have just received notification that a CCJ was issued against it last week. Having spoken to the court and then the solicitor for the claimant, the debt was accrued prior to us purchasing the business.
We have no knowledge of the supplier or the services suppied. I'm obviously keen to get this resolved asap in order to have the CCJ removed from the company record.
The claimants solicitor has asked me to confirm these facts in writing and they will then go back to their client which I have done.
Can anyone give me any advice on what the next course of action should be? I don't want a CCJ registered against the business, however don't wish to pay a debt that isn't ours.
Due diligence was carried out at the tme of the sale and a clause is included in the deed of sale confirming that there were no outstanding debts. The value of the debt is a few hunderd pounds (slightly inflated due to costs now).
Good advice greatly appreciated!
you can't get out of the debt - it belongs to the company, and it is only right that the company should pay it, regardless of who owns it.
depending on the sale contract used (on the basis that there was one, and it was in relatively standard form) you should have a claim against the people who sold you the shares in the company. best to check that first.
if you want me to take a quick look send me a pm.
depending on the sale contract used (on the basis that there was one, and it was in relatively standard form) you should have a claim against the people who sold you the shares in the company. best to check that first.
if you want me to take a quick look send me a pm.
The company need not be liable to the debt if it wasn't included as part of the "liabilities" taken over. I would look very carefully at the agreements signed at the time the company was purchased.
If the due diligence did not reveal that specific debt, then you have a problem - but you may have a negligence case against whoever performed the due diligence for you - or against the previious directors for failing to reveal the existence of that debt.
What's the chance there may be more debts lurking around that you aren't aware of?
If the due diligence did not reveal that specific debt, then you have a problem - but you may have a negligence case against whoever performed the due diligence for you - or against the previious directors for failing to reveal the existence of that debt.
What's the chance there may be more debts lurking around that you aren't aware of?
Eric Mc said:
The company need not be liable to the debt if it wasn't included as part of the "liabilities" taken over. I would look very carefully at the agreements signed at the time the company was purchased.
depends whether you bought the company (shares) or the business (assets and liabilities). if you bought shares, then in the vast majority of cases you take the company warts and all.therealpigdog said:
Eric Mc said:
The company need not be liable to the debt if it wasn't included as part of the "liabilities" taken over. I would look very carefully at the agreements signed at the time the company was purchased.
depends whether you bought the company (shares) or the business (assets and liabilities). if you bought shares, then in the vast majority of cases you take the company warts and all.I have seen clauses put into agreements where the new directors accept no resonsibilities for debts for which they were not aware - and the old directors sign an acceptance of this.
However, as you say, generally when you buy the company, you also buy the historic baggage.
If you have been sold a pup (and it does happen), you surely have a case against any professionsla you may have used in the due diligence role.
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