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Ellen, Attorney
Category: Business Law
Satisfied Customers: 36714
Experience:  25 years of experience helping people like you.
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Our young widowed daughter invested insurance money in buying

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Our young widowed daughter invested insurance money in buying a women's health fitness and day spa. After taking ownership, she began to notice that figures in "the books" were not correct. Upon researching why the figures did not match what the previous owners had listed, she realized that the previous owners had "cooked the books" by running a second business through the fitness/day spa and supplementing the supposed profits with personal funds. My daughter signed a 5-year lease which is also a huge part of the problem because after taking ownership, the landlord raised the rent to an exorbitant rate. What legal recourse does my daughter have? She is totally devastated and is afraid of losing her home, etc. Can she close the spa, file business bankruptcy, file legal charges? If so, could they come after her home, car, etc.? What should she do?


Thank you for your question. I am happy to assist you.

Your daughter has two choices:

1. File a Chapter 7 bankruptcy and have the associated debts, such as the lease, discharged (erased); or

2. File suit against the previous owners for fraud and attempt to collect damages for her losses.

Before choosing between the two choices, your daughter can consider making an appointment with a civil litigation attorney to review the transaction in depth.

She will need to find out about how much litigation will cost her, what her chances are of winning the case and what her chances are of collecting any damages.

She can then make an informed decision on which choice is best for her.

I hope that the information which I provided was helpful to you.

Best wishes for a successful outcome. If you have additional questions, please do not hesitate to submit them to me directly.

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