You financed the restaurant for a friend or relative, and now it’s run into financial difficulty. This is part 2. Last time we assumed that your friend was co-operative, so things ran relatively smoothly. This time, not quite so much!
Everything is still in arrears, just like before, but this time your friend is either unable or unwilling to co-operate. Let’s go with the “unable” since the unwilling aspect makes for a very poor choice in friendship.
So, your friend tried his best to run the restaurant but he ran into some financial difficulties, then it was severe financial difficulty and this placed him under a great deal of stress. And, you know the rest, he suffered a heart attack and is unable to assist, he’s in a coma, or he’s dead. You choose, it really doesn’t make much difference.
After you receive the call, you head over to the restaurant. You don’t have a key and you can’t locate anybody who does. You break a small window beside the door and reach in to unlock the door. The alarm goes off, and the police arrive. After 45 minutes of explaining, you’re inside.
So, you should have had a key, and you should have had the code for the alarm.
Then you turn on the lights and head for the office. Problem number two: this door is locked too! Ok, you break that lock and head inside. Now, the file drawer in the desk is locked, the filing cabinet is locked, so you decide to turn on the computer. And, it’s password protected. Things are not good at this point.
So, if you ever do this again, you’ll get those keys and the password for the computer.
You decide to call a locksmith and come back in the morning. Next day, you have the same issues. You call the suppliers. Some will speak with you and some won’t. However, if you promise to pay all the outstanding bills with them, they will all be onside. That works out reasonably well.
You speak to the employees explaining that you want to carry on until you can find a buyer. They all want to be paid up to date and they are all out there looking for new jobs.
The ovens and dishwashers don’t work properly. Aren’t they under warranty? Yes, and you gave the money for the purchases, but there are no warranties around or operating instructions. After a series of calls, the manufacturer confirms that it is under warranty but only to the original buyer, and that’s not you.
There’s another thing, you should have had a proper introduction to staff and it would have been easy to get your name on the purchase order for the equipment, which would have meant that you were covered under the warranty.
You are not covered to drive the delivery van. Your friend and one employee who already left were the only ones covered. No problem, get out your license, send it into the insurance broker and within a few days you’ll be covered too. One little problem, you have to pay the bill first.
Hydro, gas and water will be supplied, you just have to post a security deposit. Too bad you didn’t insist that that was where your money went in the first place. That also would have been easy.
Now, let’s assume that the chef stays and knows the recipes and the menu. That didn’t have to happen, but let’s just assume that some things are actually going your way.
The important aspect which was overlooked when you lent the money in the first place was all the step by step little incidentals of running the business. It’s too late to ask now. At the beginning everyone would have been willing to co-operate. Now, not necessarily.
So, write down everything you would have to do to run the business. Do you know the Visa and Mastercard access codes? What bank accounts are they linked to? Since you don’t have access to those accounts, you’ll need to set up your own account. And, if you do that, you’ll need your own insurance. While you’re thinking about insurance, you really should set up a new operating company. Anybody could get food poisoning.
Fortunately, a good deal of the information is probably in the safe. Now, if you only had the number? And what about all those people leaving messages on the phone requesting reservations, the only problem is that you can’t pick up the voice messages. Soon enough some of the simple issues will be resolved.
Just don’t forget that you did all this for a 2% annual premium.
Brian Madigan LL.B., Broker
www.OntarioRealEstateSource.com