Can a company collect on outstanding invoices of abusiness that has been foreclosed on and taken over by new ownership?
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Can a company collect on outstanding invoices of abusiness that has been foreclosed on and taken over by new ownership?
A warehouse company is owed close to 12k by another company for outstanding invoices. After repeated attempts to collect, the warehouse company is told that the other company was foreclosed on and that there is new ownership and a new name of the company. New ownership says they are not liable for the past debt of the old company and only liable for the new debt they have incurred since they took over. How does the warehouse company get the full money owed, rather than just the debt incurred by the new ownership?
Asked on October 21, 2011 under Bankruptcy Law, California
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If there has been a foreclosure by another competing creditor upon the same debtor that your company is seeking to collect against, the other creditor was first in time to collect upon the assets of the debtor before yours and there seems to be nothing that you can do as to the assets collected upon to date unless your company was in a higher secured position as to some if not all of the assets that were previously obtained.
Your company's recourse is to go after other assets of the debtor that have yet to be levied upon by a competing creditor that you have written about.
I recommend that you consult with an attorney who practices in the area of debt collection for creditors.
Good luck.
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