Location: Texas
A small, locally owned business consisting of one retail store with fewer than 10 employees gets about 40% of its inventory by purchasing items from individuals. The individuals are paid with store credit (it is not a consignment arrangement). Store owner (a man) sells the store to new owners (a married couple). The store has about $50,000 in outstanding store credits. New owners claim they did not know about the store credit situation when they purchased the store and announce that they will no longer honor the store credits.
Are the new owners obligated to honor the store credit?
Is there anything that customers who had store credit can do to get the new owners to honor their store credits? Customers fear there’s no way for them to prove they had store credit or in what amount.
Comments
It is going to heavily depend on how exactly they bought the business. If they bought the entire business entity, then they probably have to honor it because they bought the assets AND liabilities. In many cases though, they only buy the assets and the rights to use the old business name as a DBA, in which case the liabilities remain with the old business and the old owner.
If you have an outstanding $50k debt, I’d definitely see if a contract lawyer can do a bit of research on how the business was transfered and see if you can pursue the old or new owner for it.