Seller financing set-off clause arbitration
January 29, 2024
by a searcher from University of North Carolina at Charlotte in Charlotte, NC, USA
Hello! I'm under contract to acquire a business that has a large amount of seller financing. There were a lot of cash transactions, so we have included a right to set-off the note inside the APA, and are looking for a way to arbitrate that in the event it is needed. Looking to protect myself as the buyer if it turns out labor or inventory were being bought under the table, and the seller (understandably) is not willing to leave the full discretion on setting the note off to me as the buyer.
Can anyone recommend a company that offers dispute arbitration services that we can have on deck in case it is needed? If anyone has used services like this before, around what price points have you seen? This is a smaller transaction (under 500k).
in Boca Raton, FL, USA
HERE'S A RULE FOR BUSINESS BUYERS: if the seller can't prove it, you can't pay for it. End of story!
Have you carved out ALL of these unreported activities from the valuation and set up these alleged other revenues/profits as an earnout? I may be reading your post wrong, but it sounds to me like you're paying a price inclusive of what the seller has represented as being part of the business without providing any proof or detail. If the latter is the case, BIG mistake on your part...and if you go to Vegas, the line on that deal is you are going to get screwed.
from North Carolina State University in Pennsylvania, USA