A Nanaimo accounting firm that purchased a Lantzville business filed a civil suit in the Supreme Court of B.C., alleging that the sellers breached a non-competition agreement. The suit also alleges the sellers did not provide the documentation and intellectual property required as part of the sale.
The accounting business, Barber and Haime Inc., was sold to B. Rushton Inc. for $727,000 in August 2017. Sale terms included a six-year non-competition and non-solicitation agreement. According to the court documents, Colin and Denise Haime were to retire: instead they opened an online accounting service yet the sale agreements prohibited them from carrying on an accounting business within 55 km of their former office nor solicit previous clients.
The lawsuit also alleges that the sellers have not turned over all the client files and billing records associated with their former business. This made it difficult for the new owner to serve pre-existing clients of the purchased business.
The dispute illustrates why those buying a business need the expert advice of a Business Broker, notes Michael Michael Naprawa, CBI, BBA.
“A business purchase is a very complex transaction. Both buyers and sellers need to ensure they are protected,” he said. His company, BC Business Brokers, is often called upon by lawyers to provide the expertise necessary in business sales and acquisitions.