I have been approached with an opportunity to purchase a business, however, the business has just been issued a subpoena from the AG of the ...

Question

I have been approached with an opportunity to purchase a business, however, the business has just been issued a subpoena from the AG of the state of Kansas. Would I be subject to the same investigation if the business was purchased by myself under different article of incorporation. The investigation is into the advertising practices of the company, which would change once ownership would change hands. I would like to make sure that I would not be under any risk of injuctions or otherwise that would cause me to have to stop business operations when I was not the owner of the business when the subpeona was issued. Any advice is appreciated.

Answer

Of course you would be subject to the subpeona, if you own or possess the records of the business. If you operate the business under the danger company name, an injunction would still be effective. But, if the new corporations merely buys the assets of the tainted business, the new company might be free to operate. Obviously, the value of the present business is worth very little or nothing until the cloud is cleared up. The only real value would be the inventory, equipment and possibly the buildings and grounds. Based upon what you report, the accounts receivable are probably worthless, and the bad will of the company reduces the value of the assets.

Good luck