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Law Educator, Esq.
Law Educator, Esq., Attorney
Category: Legal
Satisfied Customers: 117401
Experience:  JA Mentor -Attorney Labor/employment, corporate, sports law, admiralty/maritime and civil rights law
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We (my husband and I) were employed by a manufacturing companys

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We (my husband and I) were employed by a manufacturing company's retail location who decided to close their doors. We decided to take over the business. They had stopped paying the rent on 10/2010 along with all of their suppliers. They told us they would be maintaining their manufacturing plant that they were just closing this retail store. We officially took over 12/17/2010 a date picked by them on 1/15/2011 so we were then required to back date utilities, which we paid.
They also refused to pay our wages or the technician's wages so we covered all of it. They also refused to pay the accrued vacation time.
Our main supplier of chemicals and parts refused to work with them for lack of payment so we opened up an account of our own and started selling anything we bought in the store. If it was something od theirs we sold that and gave them the money. This went on until 1/15/2011 when they called us up threatened to send the sheriff over to arrest us for stealing. We had sent them an agreement on 11/24/2010, they never signed it, and sent it back on 1/25/2011 with a bunch of changes to the contract.
They had wanted us to take over the main supplier's bill of $15,000.
We thought it would be fair at the time to trade for the remaining stock.
Then on January 15, 2011 we find out they are closing the manufacturing plant and will not be honoring any warrenties.
We are in a small town, my husband has been the manager here for over 5 years he cannot look the same people who bought a spa ONE WEEK before and tell them they are no longer under warrenty. 1/15/2011 was when they told us we would be responsible to pay for any warrenty issues.
There were still about $55,000 worth of mechandise on the floor when we took over. We sell hot tubs so that is about 4 tubs plus a little bit of chemicals and other parts.
We have called them repeatedly over the last 3 months leaving messages every time to clarify what is going on.
Now they are saying they intend on sending a truck up here to pick up the rest of their merchandise.
We have been selling their stock to pay for the mess they left. We thought they would either give us credit for the warrenties but now they are refusing to honor any warrenties.
Now we would have moved the store, changed the name if we had known when we took over that they were going to skrew over about 150 people in our small town. Word travels fast and that would mean death to our business. So we have been paying for all of these repairs, including returning $1000 deposits on orders for spas; monies that were paid to them that they are now refusing to pay.
In making a conservative estimate on how much they owe us we come up to about $60,000 including covering the warrenties on spas they promised to people.
They are demanding we cover the main supplier bill along with returning the last 4 spas.
I say take me to court and we will have a judge decide what is fair.
I am being forced to stand good for their debts and I think their product should pay for it. None of the their spas can come with a warrenty unless we provide it and most people shy away from a manufacturer who has gone out of business so even when we sell these suckers they are worth a fraction of their original amount.
I have documentation to back up all monies spent on their behalf.
So by keeping their spas and selling them to cover their debts am I in the wrong?
Submitted: 6 years ago.
Category: Legal
Expert:  Law Educator, Esq. replied 6 years ago.
Unfortunately, if they are closing their business, the warranties are no longer valid and if you choose to cover them you may do so, but you would not have any recourse against the main company. You would have grounds to sue them for any money owed you from the dates before you took over ownership, including wages and bills. However, if they file for bankruptcy, I am afraid that you would have nothing to collect from. At this point, you have grounds to hold the merchandise from them as security to pay the debts, so you need to inform them of what they owe you in writing and at this point, because you are a business you need to be represented by an attorney in any legal action you need to begin getting an attorney to represent you against the company for the money due you, which you have claim for and you have rights to refuse to surrender the merchandise as a lien until they settle the claim.

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