FAR 1.96% 50.0¢ far limited

7.1 Million shares short sold on Friday, page-51

  1. 912 Posts.
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    "If I sold you my corner convenience store business for $200K and that business leased its premises on a 5 year lease @ $50K per year and has 4 years to run did you really pay me $600K?

    Ans: No you paid me $200K. I only received $200K.

    The lease commitment is a contract that is transferred with the sale.

    The sale price is the sale price, any contractual obligations that come with the sale may have a cashflow impact on the new owner and the seller but that is why the buyer needs to offer what they think it is worth."

    Not a great analogy, but I take your general point.
    However, let's say the debt relates to a pair of delivery trucks used in the business and the business has paid-up 20 yr leasehold title over the premises. I want to buy the business as a going concern and we agree on $200k.
    It turns out that the neighbour has prefential rights on transfer of the leasehold, and the lease agreement is drafted so as to 'see through' the arm's length sale. The neighbour doesn't need the trucks because his mate has a couple of his own lying around. You may walk away with $200k and a couple of trucks you don't know what to do with. I can see why you would be unhappy.
 
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