Would you steal something on a technicality?

[peppy]

I read tonight in one of the comments that the new owners are putting money in escrow, so there may be more to the story.

[id10t]

Well, I wouldnt download a car ...

[herr_oberst]

Originally Posted by peppy

I read tonight in one of the comments that the new owners are putting money in escrow, so there may be more to the story.

I'm admittedly not very smart. Why are they doing this?

[wdfifteen]

Originally Posted by herr_oberst

I'm admittedly not very smart. Why are they doing this?

To avoid the claim that they are avoiding payment. I did a one-year tax withholding during the Vietnam War and put the tax money in escrow. Our lawyer said it was to prove you weren't keeping the money for yourself, you just weren't giving it to the other guy on principle. I'm sure there is a more elegant way to explain it in legalese, but that was the gist of it.

[herr_oberst]

Thank you!

[greglepore]

^Bingo.
The deal with any restaurant biz is that its very hard-margins around 5%. To do that you have to be very good and at it a very long time and not have economic uncertainty. I think these folks are "paying themselves" a take home and at the end of the month they don't have 1k to fund this.
Whatever. Mutual mistake voids the contract, and you're left with what lawyers call equitable remedies, in this case "unjust enrichment", which the buyers certainly have been. Whether they're forced to pay 1k a month is open to question, but the most likely outcome.
A court might well find that the distinction between llc and inc is meaningless and reform the contract, which is what these douchebags deserve.

[wdfifteen]

One of the great benefits of aging is that I can honestly say I cannot recall ever stealing anything.
What was the question again?

[herr_oberst]

Plaintiff's attorney; "And when did you make your first payment to that escrow account?"

Defendant; "May 8th 2025"

Plaintiff's attorney; "Isn't that the same day that the newspaper article was published?"

Defendant's attorney; "Objection, Your Honor!!"

Judge; "Overruled. You may answer the question."

[Arizona_928]

Well… weekly payments of 1k. They completed 11 payments totaling 13k on a restaurant they did not purchase… If I was the buyer, i would feel scammed…. If i was the seller, i would have inadvertently scammed someone, then essentially ruined any future profitability…

[greglepore]

Originally Posted by Arizona_928

Well… weekly payments of 1k. They completed 11 payments totaling 13k on a restaurant they did not purchase… If I was the buyer, i would feel scammed…. If i was the seller, i would have inadvertently scammed someone, then essentially ruined any future profitability…

Huh? The bought the goodwill of an ongoing business, the equipment, everything that was the "restaurant" but the real estate, and the lease for that was assigned.

I'm at a loss as to your thought process, and I was a litigator for over 30 years.

[Arizona_928]

If i bought a house for 123 pine ln and the paperwork was for 123 pine st., i would feel scammed…


Goodwill would only go so far at this point.

[greglepore]

Everyone signed the same contract.

Caveat emptor.

Its a simple mistake, and pretty common. I'm in a boat partnership with a "partnership agreement" and a Delaware LLC designation that is mistakenly registered in Delaware as a corp b/c someone checked the wrong box when filing what is clearly the partnership. I don't own part of the boat? Think not.

By goodwill I meant it in the business asset sense, its the value of the ongoing name and the business reputation. It has an asset value, which the buyers acquired.

[wdfifteen]

Originally Posted by Arizona_928

If i bought a house for 123 pine ln and the paperwork was for 123 pine st., i would feel scammed…

Hard to follow your thought process here. If there was a house at 123 Pine on which both you and the seller agreed to a sale, and the paperwork was for a house on 123 Pine St that neither of you agree to a sale on, why would you feel scammed?

[Arizona_928]

The seller sold something they did not own, let alone even existed.

Clerical error. IMO without malice.

[herr_oberst]

Now I'm really confused. 123 Pine St. vs 123 Pine Ln.?

I guess the simple solution at this stage is for the new owners to take over the Dixie Restaurant, Inc (the one across town?) and the previous owners of the Dixie Restaurant LLC will have to go back and work the restaurant again until they find a new buyer.

[Arizona_928]

Originally Posted by greglepore

Everyone signed the same contract.

Caveat emptor.

Its a simple mistake, and pretty common. I'm in a boat partnership with a "partnership agreement" and a Delaware LLC designation that is mistakenly registered in Delaware as a corp b/c someone checked the wrong box when filing what is clearly the partnership. I don't own part of the boat? Think not.

By goodwill I meant it in the business asset sense, its the value of the ongoing name and the business reputation. It has an asset value, which the buyers acquired.

I agree. Hence the whole escrow thing.

Having social media trend the business as stolen while both parties are in the wrong has yet to be seen if it’s leading to a negative reputation and goodwill of the business. If the business fails due to this error, who has to be made whole?…

[wdfifteen]

Originally Posted by Arizona_928

The seller sold something they did not own, let alone even existed.

In that case, the buyer took possession of something that they didn't buy.

[greglepore]

Red, I don't disagree if its a true escrow-ie with a 3rd party intermediary. If what it means is "we have another account for this at our bank" then no.

[Sooner or later]

My guess is the new owners will end up paying.

[Sooner or later]

I won't go into all the details of this mess.

When I sold my parents house after their passing the closing went fine. Six months later it was discovered that the survey from 1969 was wrong. The closing company knew the survey was incorrect (per the gentleman that shot the closing survey). Basically, the new owners bought some of Euclid Steet.

I was required to pay for a new survey to correct the problem. I was not a happy camper.