M&A Post-Closing Technical Aspects

Here are some important steps to consider after the closing of your business sale:

• Renew UCC Liens: If you’ve financed the sale of your business and filed a UCC lien to protect your interests, make sure to keep track of its expiration date. UCC liens must be periodically renewed to remain valid.
• Maintain a Relationship with the Landlord: Even after the sale is complete, you may still be a guarantor on the lease. Stay in touch with the landlord and request immediate notifications if the buyer faces any issues with lease payments. This proactive approach allows you to intervene early if necessary and assist the buyer in resolving any problems.
• Closing the Entity: In some cases, the seller may choose to close the entity to which the note is due. However, be aware that this could complicate the enforcement of seller financing notes. When an entity closes, its assets are typically held in trust, with a distribution process that prioritizes debt repayment and owner interests. If you close the entity and later need to enforce the note, you’ll likely have to provide documentation proving the proper liquidation of the entity and your status as the beneficiary of the note in accordance with state laws.