Case Study: Bankruptcy encourages settlement of lawsuit

Encourage the settlement of business lawsuits

For the past 5 years, Ken has been operating Convenient Car Care as a sole proprietor. He bought the business from Gary after working for him for 10 years. The purchase contract required Ken to pay Gary $1,000 per month plus 5% of the shop’s gross receipts for 7 years. Ken also agreed to provide accurate monthly sales records to justify the 5% he was paying Gary. The business’ gross receipts took a big hit when another repair shop opened around the corner. Ken fell behind on his payments to Gary, who became angry fearing that he could lose the …

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