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The answer to a large extent depends on the purchase agreement you had and note.
if the purchase agreement specified that in the event of default you are liable to certain damages (which would result from the loss of opportunity for the seller, money damages etc.) then the seller would be in the position of suing you for the damages
though that is the theoretical case let's address the reality of how this might turn out and whether your credit is in jepordy
ok let me know
So, what do you think? Could I "walk away" from the owner financed loan and hand over the business? That should satisfy the owner financed loan, correct? I haven't seen anything in the asset purchase agreement that stipulates damages for loss of opportunity, etc.
If the agreement provides that in the event of default the only remedy is to hand over the business then that's what you should do. You cannot stop the other person from trying to go after you if they believe that you somehow owe more (justifiably or not) but you will have a good legal argument as why the sole remedy is to hand the business back
Realistically, if you are in somewhat good relations with the seller then you should coordinate with them the default and the hand over. Do as much of it in writing as possible (email is fine) so that you can prove in the future that the seller agreed to this and in fact went along (in case the seller changes their mind and decides to go after you)
I do suggest that you use an attorney to arrange for a written waiver from the seller and also have the attorney handle the UCC filing, if such exists.
Finally, if you purchased the agreement using a company remember to continue using the company as the entity that will be defaulting (not you personally) to avoid personal liability
Not sure I can avoid the personal default since the promissory note, etc was drawn up in my name not my LLC. A default is better than a bankruptcy I suppose.
So, I should get an attorney to draw up the waiver from the seller to essentially say that the loan is removed due to handing over the business?
yes. BTW, the default in it of itself should not effect your credit. It is an internal matter between you and the seller. So as long as you can come to terms with the seller or as long as the seller does not sue you then you should be all set. That's why I would recommend having a waiver as that would end the potentiality of a suit.
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Ok, that makes sense - I appreciate all your help
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