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I live in California and own a fast food restaurant that is a
franchise. The restaurant has been in the family for 52 years. My
grandfather opened the doors in 1952. He has since passed away and
left the property and franchise to my mother. In Feb. 2002, I
recieved a phone call from my mom. She told me the restaurant was
closed because she could not affort to pay her bills. The power was
the final straw that broke the back. I saw this coming and had talked
to her in the past about buying the business. Once the business was
closed, she asked me if I would be interested in buying it, since she
did not have the financial means to pull it out.
I talked it over with my wife and talked to the President of the
franchise. The franchise said he would work with us since it had been
in the family for so long, but we needed to get it open within 30 days
or we would loose the franchise. My wife and I pulled our money
together and managed to pay off the outstanding power bill and swith
the bill in our name. We also hired an attorney who drew a contract
and had the property quick claimed / deeded to me. We also had my mom
list all debt she had against the property and business. With all of
this information, we also agreed on a price that I would pay her for
the property / business over a 10 year period. Things were going good
and we opened the business within the required 30 days.
My mom had a 1st and 2nd mortgage on the property, which I knew about.
The intrest was extremely high so I planned on refinancing during the
summer. There was no bulk sale noticed published, but there was a
transfer / abandonment of the fictious business name in the newspaper.
When I went to refinance, BAM I was knocked over there were 20+ leins
against the property. She did not disclose these leins to me and the
far exceeded the amount I agreed to pay her over the 10 year period.
The appraisal came back way below the amount to pay off the mortages
and the leins. No matter what I did I could not pull us out of the
hole and we appeared to be heading down the same path my mom was in.
The exception we took care of our bills and the creditors are all paid
in full by us. I have the oppurtinity to sale the business / property
which will satisfy all leins and the 1st and 2nd mortage and I may
even have a little money in my pocket in the end.
We have hired an attorney and he has been with us working on this mess
for the past 10 months. What I have written is the readers digest
version. My question is this....What is going to happen if we sale
the business / property and the bulk sale is listed in the paper. I
am willing to pay off all the leins that were attached to the property
that were not disclosed to me, but I am worried we will have to deal
with all the others trying to get their money owed my by mom.
We live in a small community people known who my mom is and who I am.
At face value to looks we were trying to pull a scam. This is not the
case and as a matter of fact the two of are not even talking. I just
want to get this behind me. Any info would be appreciated.
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