Results 1 to 5 of 5
  1. #1

    Default Late Payment of Installments on Debt from a Business Acquisition

    My question involves business law in the state of: NY.

    Two years ago I agreed in arbitration to sell my share of a wholesale and retail business to the other member of the LLC. The products are consumer products. Because the other party claimed he didn't have enough funds to settle the agreed price at once, we included in the agreement payment clauses that split the amount into a 50% cash portion and a 50% inventory portion. The agreement gives me the right to resell the inventory for profit. The payouts are spread in 16 payments each quarter over four years. For the inventory portion of the settlement from time to time I order the inventory which is then shipped to me. If I exceed in my order the inventory allowed quarterly by the settlement I pay cash.

    For late payments of the cash portion of the settlement, we agreed to a 15-day grace period, and interest equal to the 1-year LIBOR rate plus 2%. We also had a final clause that any controversy about the agreement shall be settled by arbitration. It now happens that the payments are always late, and I add a penalty: right now they are three months late, but the LIBOR is only 1.94% per year so the total interest is 3.94% per year, and over three months it amounts to a meager 1% of the amount owed. This is probably less than what it would cost them borrowing money from the bank. So I suspect that they are late because I'm cheaper than the bank. At the time of negotiating the agreement I had asked for a higher late payment interest, but the arbitrator convinced me that it was customary business practice to keep it at that level.

    What legal recourses do I have, other than filing another Arbitration proceeding?

  2. #2
    Join Date
    Oct 2016
    Posts
    435

    Default Re: Late Installments of Agreement Payments

    Other than interest payments does the arbitration agreement say anything about if the other party is in default or limit your actions if they are? Does it require further arbitration or does it allow you to sue?

  3. #3

    Default Re: Late Installments of Agreement Payments

    The only language included to that extent, says:
    Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration in New York, NY conducted before a sole arbitrator. (follows additional language about Federal Arbitration Act etc. and ending with "Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.") ...

  4. #4
    Join Date
    Oct 2016
    Posts
    435

    Default Re: Late Installments of Agreement Payments

    Sounds like you need to head back to arbitration and claim they are in default.

  5. #5

    Default Re: Late Installments of Agreement Payments

    PayrolGuy, thanks for confirming that.

    1. Sponsored Links
       

Similar Threads

  1. Loan Agreements: Current Car Payment Applied to Late Fee Balance Before Being Credited to Debt
    By snackmix in forum Cars and Dealerships
    Replies: 2
    Last Post: 08-11-2015, 08:12 AM
  2. Collection Lawsuits: How Would a Junk Debt Buyer Prove its Acquisition of a Debt
    By StressedInMichigan in forum Debts and Collections
    Replies: 9
    Last Post: 10-16-2012, 07:50 AM
  3. Settling a Debt: Debt Settled With a Payment Plan, Revoked Due to Late Payment
    By Florod621 in forum Debts and Collections
    Replies: 3
    Last Post: 10-01-2012, 11:34 AM
  4. Rent and Utilities: Late Fees for Non Late Rent, Water Bill Payment Applied to Late Fees
    By cwhite in forum Landlord-Tenant Law
    Replies: 2
    Last Post: 10-10-2010, 09:07 AM
  5. Condo & Co-Op Boards and Associations: Late Fees Continue Monthly For One Late Payment
    By itsyourbet in forum Real Estate Ownership and Title
    Replies: 3
    Last Post: 06-07-2008, 12:26 AM
 
 
Sponsored Links

Legal Help, Information and Resources

Forum Sponsor
Legal Forms - Buy easy-to-use legal forms.