Our Client

Our client was the vendor of an organic wholefoods business. They had been running the store for 5 years, and were looking forward to taking an overseas trip once the sale of business was completed.

The Challenge

The business broker of the transaction failed to collect the purchaser’s deposit. They also failed to negotiate important details of the transaction before having the Heads of Agreement (which sets out the initial terms of a business sale) signed by the parties, and were non-responsive after the Contract of Sale was signed.

The purchaser’s solicitor was also non-responsive, and not up to date with their client’s circumstances or activities.

The purchaser themselves was slow to provide documents, but wanted to move the sale forward. To do so they provided our client with false information and took possession of the store without our knowledge, before paying the purchase price, leaving us to salvage settlement.

The Solution

We needed to take greater control of the matter. In a typical sale of business, we assist only our client. But in this case, we needed to be much more involved and proactive, assisting our client and working more closely with the purchaser’s solicitor to keep things moving on both sides of the transaction.

For instance, in a usual sale of business matter, the purchaser drafts settlement adjustments (a splitting of costs incurred over the settlement process to ensure the purchaser and vendor are only paying for outgoings incurred during the time they each legally own the business). However, in this case, we took the initiative to prepare adjustments ourselves to ensure that everything was ticked off the to-do list in time. We also had to be more active in managing the processes of the transaction, including directing and prompting the purchaser’s solicitor.

The Win

We greatly eased the stress and burden on our client and protected them from the mistakes of the purchaser, the purchaser’s solicitor, and broker.

Despite the purchaser taking possession of the business earlier than planned, we were still able to salvage settlement. This avoided the need for them to cancel their travel plans, and they were able to enjoy a stress-free holiday.

The Lessons

• Always keep your lawyer in the loop! We knew when to be proactive and take greater control in this matter because our client kept us as up to date as possible.
• Engage a lawyer with experience on both sides of the transaction – that experience is why we were able to assist the purchaser’s lawyer and keep things moving.
• Always consult your lawyer before taking action. It’s important to follow due process, and your lawyer can make sure you don’t jump the gun like the purchaser did when they took possession of our client’s business early.
• Remember that settlement dates aren’t written in stone – they often change throughout a matter. It’s wise not to book anything around a settlement date that can’t easily be moved, from moving trucks to holidays.