Can I collect money owed to my now deceased father from a company that has since been resold?
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Can I collect money owed to my now deceased father from a company that has since been resold?
My father had 30k board feet of lumber. He took it to a lumber company. They worked on it. He paid them for the milling services and storage fees. He then missed a payment. They sent him a letter regarding this. He was not able to pay in full. The next letter stated that his lumber was sold to cover the balance and that there were funds left over. He was told that he could contact them for the money. He wanted to sue them because there was no lien. My father died this year. The company was sold and purchased twice. Will the new parent company return the money to us?
Asked on October 6, 2011 under Bankruptcy Law, California
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
There is very little chance you could recover this money.
First, bear in mind that just as you do not inherit your father's debts (i.e. someone who loaned money to him can't sue you), you don't inherit his causes of action. His estate, IF the estate has not yet been wrapped up, may be able to sue, since the estate can enforce debts owed to the decedent; but you personally cannot, and so if the estate has been wrapped up or the administrator does not want to sue, there is nothing you can do.
Second, there are two ways a company can be sold: first, by selling the actual business entity (the corporation or LLC), and second, by selling only the assets (the inventory, the name, the accounts receivable, etc.). In the first case, the owner becomes liable for the debts of the previous company; in the second case, it does not. With two sales, you would need both to have been the first kind of sale (selling the actual corporation or LLC) to have any chance of taking action; if either sale was only of assets, you most likely could not.
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