If I paid for a package of classes with no expiration date but the business has since been sold and the classes are no longer being offered, does the new owner owe me a refund?

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If I paid for a package of classes with no expiration date but the business has since been sold and the classes are no longer being offered, does the new owner owe me a refund?

I bought them 6 months ago. The business was then sold without warning last month and the new owner (who has changed the studio name and number as well) is no longer going to offer the classes I have already paid for. She says I can take different classes which I don’t want to do. My package specifically states the type of class she is omitting. Do I have a right to a refund and if so who gives me the refund? Old or new owner?

Asked on June 25, 2015 under Business Law, Georgia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

The issue is *how* was the business sold. If the business had been a corporation or an LLC and the new owner bought the business structure--that is, bought the corporation or LLC (i.e. bought all the stock or prior owner's ownership interest in an LLC)--then, since it is still the same business entity, it is liable for the package, and if it no longer offers those classes, would have to offer you a refund.

However, if the new owner did not buy an existing LLC or corporation, but just bought the business assets (e.g. accounts receivable, equipment, inventory, etc.), then the new owner is not liable for the pre-paid classes, sicne she (and her business) were not the entity which sold those classes. You'd have to try to look to the former owner or the corporation or LLC that previously ran the business for a refund, which might be more work than it is worth.


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