Daley & Heft Partner Scott Noya recovered $280,000 on a $200,000 promissory note for a business client who sold a gas station and car wash operation in Chula Vista but did not receive full payment from the buyer.
Payment of a $200,000 portion of the business purchase price was conditioned on the buyer/new owner’s timely exercise of a future option to extend the site lease. After the business sale, buyer later exercised the option, but it entered into an agreement with landlord for a term shorter than the full lease option extension period. The buyer then refused to pay seller the portion of the purchase price conditioned on the full 5-year lease option extension.
Daley & Heft issued a notice of default on the $200,000 portion of the promissory note conditioned on lease option extension, and the client’s demand for payment of all unpaid principal, late fees and accrued interest at 10%. The client’s demand also included a claim for attorney fees.
Because the promissory note included cross-default provisions, Daley & Heft also issued notice to buyer accelerating the note’s monthly payment obligations on that portion of the purchase price debt not conditioned on the lease option extension.
After issuing the notice of default, payment demand and notice of acceleration of the note, the buyer agreed to settle and paid our client’s demand in July 2018.
Daley & Heft’s client, a retiree, recovered $280,000, including late fees, interest, and all attorney fees.
Scott Noya can be reached at 858-755-5666, ext. 7222, or snoya@daleyheft.com