The co-signer on our loan seized over $100,000 worth of assets belonging to our business because we were unable to pay a $33,000 loan on time. He also seized all personal items that were in the business building at the time. We know that he has been selling off inventory at whatever prices he wishes- but has not given us any record of those receipts. Do we have a right to get our personal items and a record of receipts? Is it right that he can keep $67,000 more in assets than we owe?
No, of course none of it is "right." Especially the part about taking personal items out of the building, the police of course would have been notified immediately of the theft.
But, I sense there's more to the context behind this. Did the co signer start taking things, or did the lender whose debt was co-signed begin to exercise rights under a note that was in default to exercise rights of possession pursuant to the default? If there were UCC liens filed on particular pieces of equipment or inventory, and a loan went unpaid, then pursuant to the correct procedure, the lender would have a right to sieze collateral. However, there is a procedure for all of this and I sense there is a lot more to the set up of the business.
I believe you can not afford not to retain an experienced business attorney in your jurisdiction to sort through this mess and advise you how to best address your legitimate concerns.
I wish you the best with it.
This answer is provided for informational purposes only. Actual legal advice can only be provided in an office consultation by an attorney licensed in your jurisdiction, with experience in the area of law in which your concern lies.
I agree with Mr. Myers and a co-signer traditionally only has the right to pay, not to collect except after a judgment. The local law enforcment should be your first stop , and a lawyer should be your next to obtain an injunction to stop the further unlawful liquidation. When asset liquidation is the only form of repayment the courts usually require a bond and court order to seize assets.
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