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NSW Financial Statements Provided by Sellers were Unrealistic - Now Facing Bankruptcy

Discussion in 'Debt and Bankruptcy Law Forum' started by Alf, 15 November 2015.

  1. Alf

    Alf Member

    15 November 2015
    Likes Received:

    I bought a small business earlier in 2015. It now appears that the sellers (husband and wife) provided the financial statements for their trust which included income not relevant to the business they sold me.

    I am now facing bankruptcy because the revenue projections based on the financial statements provided by them were unrealistic. The sellers are my landlords and just keep telling me they always had money to pay the bills when they owned the business, they don't know what I'm doing wrong.

    Do I have any rights under in this situation?

  2. James D. Ford - Solicitor

    James D. Ford - Solicitor Well-Known Member
    LawTap Verified Lawyer

    19 June 2014
    Likes Received:
    Hi Alf

    The short answer, is that you might have legal grounds to sue your LL (as the Vendor of the Business you have purchased), for

    1) Misleading & Deceptive Conduct; and /or

    2) Breach of Contractual warranties pursuant to the terms of the Business Sale Agreement.

    In order to gain a better understanding of the facts of the matter:

    How was the income presented in the financial statements? As included within the income of the Business? Or separated as other Income?

    How much income was included (but was not relevant to the Business?

    A lawyer would need to review the Business Sales Agreement, before commenting further and providing advice regarding any potential claim for Breach of Contract.

    Kind regards
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    Tim W likes this.

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