What to do if our wedding venue went out of business after my fiance and I incurred costs?

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What to do if our wedding venue went out of business after my fiance and I incurred costs?

My fiancee and I put a down payment for a wedding and reception hall for a place that has gone out of business. What avenue can I take, if any, to seek reimbursement for my deposit? It was after we had invested money for invitations, room rental, etc.

Asked on May 5, 2012 under Business Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Legally, you may sue for the return of your deposit and possibly additional economic damages (costs or losses, such as invitations naming that venue) which naturally flowed from the breach of their contract (their failure to host your event).

Practically, you may not be able to recover anything. If the business was an LLC (limited liability company) or a corporation (an "inc."), it was its own legal entity or person, and you could only sue the business itself. If it has gone out of business but has not been dissolved, you may be able to recover compensation if it still has assets (e.g. a bank account) and/or income (some receivables or payments still coming in). But if the business has no assets or income, there is no money, so even if you win your lawsuit, you would not receive anything. And if an LLC or corporation has been dissolved, there is effectively no remaining entity to sue.

If the business as not a limited liability company or a corporation, though--for example, say it was a sole proprietorship or a partnership--you may be able to sue the owner(s) as well, since in that case, the business has no separate legal existence apart from the owner(s). In this case, you would have a much better chance of recovering compensation, since you could look to the owner(s) personal assets, such as his/her own bank account, real estate, personal property, etc. as a source of payment.


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