Here’s the situation. I have lent hard money to a local company (50% ROI)while they wait on a venture capital loan to buy the floor above theirs in the building they are in (I went through their books, and my attorney contacted him and went over all contracts. Everything was legit). They hired another manager, and since the funding was taking longer than expected, the new manager needed to be paid immediately (the reason they went hard money). The loan was supposed to be repaid by March 31st, but our contract states if funding has not arrived by then, the loan amount would be repaid over a six month period, or whenever they received the VC.
Well, March 31st came and no payment. He has until the 7th until a late fee of 5% is added. If payment is delayed longer than 30 days 18% of the total loan is due, and I can make the note due at that point in 24 hours.
I have emailed him and called him, but nothing.
The owner lives a couple miles from my house (nice house). Before I contact my attorney, what would you suggest my next line of action is? I have his signature as the business rep, his signature personally, and his wifes on the promissory note.
What normally happens if he still refuses to acknowledge my calls and contacts? I’ve called his office (left VM), his cell (left VM) and email. I have his home phone number, but since he technically has until the 7th, I don’t want to call him at home yet.
In the instance a month goes by and nothing, the contract also state he is responsible for all costs and legal fees associated with collecting the money owed. What are the steps in doing this, and how does this happen? Are wages garnished? Lien on his property? Lien on his business?
Just curious if there are any attorneys here or anyone who may have gone through something similar…
what is the loan secured with?
i’d say talk to your attorney - things should be automatic, with no guessing games.
The loan is secured by the company’s revenue, and the owner and his wife individually (I would imagine their home and nice Mercedes, too).
Looking over the agreement, the VC is coming from TYK investment co. From googling them, they seem to be an off shore scamming company. I’m a little nervous about that.
I would still think my money is secured, though. If they are scammed by the VC, I would imagine a judge would still find in my favor in collecting from them, no?
do you have the contract?
to me, a company’s assets could be not the best thing to have a loan secured to…plus all the legalities surrounding sueing for your money…
you lent money to a company to buy real estate? and your money is not secured by a mortgage - lien on that property?
when i sold my business we had an option of selling it to the buyer by financing a portion of the deal by putting liens on all of the equipment…which made up about 40% of the total deal…
in the end the buyer came up with the cash. the notes were going to be due in 90 day increments over 3 years at 11% or something like that. but i knew all the ins and outs of it. our attorney had it all ready to go and we discussed and reviewed it IN DETAIL.
make an appointment with your attorney asap. find out what the deal is - YOU SHOULD NOT HAVE TO DO ANYTHING.
your LAWYER(S) should be on this…
if they are being unresponsive, I’d say the next step is a certified letter, return receipt requested.
Thanks for everyone’s response so far. The owner finally contacted me. He’s been out of town working with the other VC company (he was piggy backing them to see which would fund first).
He gave me the story his business has been audited by his partner due to the fact they were not receiving a revenue source they thought they should have been receiving. All revenue going in or out was stalled. (I don’t know if I believe that)
I should have clarified that he is not buying the floor above his, but leasing it. That’s why there is no lien against real estate with this transaction. It is secured both by the company’s assets and his personal assets (where I’d imagine his expensive home would also be considered). My attorney contacted him this morning, and stated the certified would go out early next week in the event payment is not received.