(888) 785-9923 Sold a business, the buyer kept over $550,000 in receivables that belonged to the seller.
A Nevada business owner sold their company under an agreement that clearly reserved pre-sale accounts receivable to the seller. When the buyer collected those funds and refused to remit them, we filed suit, asserted multiple legal and equitable claims, and recovered more than $550,000 through settlement in under a year.
Docket
Jurisdiction
Clark County, Nevada
Client
Plaintiff (Business Seller)
Matter
Business Sale Accounts Receivable Dispute
Duration
Under 1 year, filing to settlement
Status
Settled — seller recovered over $550,000
Case summary
When a Nevada business owner sold their company, one term of the deal was unambiguous: the money customers owed the business before the sale belonged to the seller, not the buyer. The buyer collected those receivables anyway and refused to turn them over. Milan Chatterjee filed suit, and the matter settled for more than $550,000 in under a year.
On this page
01 · Situation
After years of building their business in Nevada, our client decided to sell. They found an out-of-state buyer, negotiated the sale of the company in full, and, as the deal took shape, the parties revised their agreement to settle precisely how the value of the business would be divided at closing.
One provision proved decisive. Like most operating companies, the business carried outstanding accounts receivable: invoices issued to customers but not yet paid. The final agreement assigned that money to our client. Everything billed before the sale closed was the seller’s to keep; the buyer acquired the company going forward but not the revenue the seller had already earned. The buyer even agreed to assist in collecting those receivables and remitting them. It was a clean, deliberate allocation, and it was written into the signed contract.
The buyer honored none of it. After taking over, it collected the outstanding receivables and simply retained the funds. Our client followed up repeatedly and received no meaningful response; before long, the buyer stopped communicating altogether. Holding a signed agreement that plainly entitled our client to the money and facing a counterparty who had gone dark, the seller turned to Milan Chatterjee to recover what they were owed.
02. The legal challenge
On the merits, the case was straightforward. The contract, governed by Nevada law, assigned the pre-sale receivables to our client in unambiguous terms, and the buyer had taken them regardless. The difficulty was not proving the breach; it was collecting. The buyer already held the funds, had commingled them with its own, and had stopped responding, which meant a favorable judgment risked being worth little if there were nothing left to satisfy it.
We built the case to close that gap. The core claims were breach of contract and breach of the covenant of good faith and fair dealing that Nevada implies in every agreement. To reach the money itself, we added a conversion claim for the buyer’s wrongful retention of funds that belonged to our client, and asked the court to impose a constructive trust and equitable lien—remedies that allow a plaintiff to trace misappropriated funds into whatever they have become and assert a priority claim against them. We sought a declaration of the parties’ rights under NRS 30.010 and pursued punitive damages under NRS 42.005, heightening the buyer’s exposure and its incentive to resolve the matter rather than litigate it to judgment.
What was at stake
For our client, the exposure was total: the receivables represented revenue the client had already earned but never been paid, and if the claim failed they would simply forfeit it. The buyer controlled both the money and the business it had come from, so absent a successful suit there was no practical path to recovery—and every month of delay increased the risk that the funds would be dissipated beyond reach.
03. Our approach
How we defended the claims, shifted the leverage, and moved the case toward a resolution that let our client keep their business, in three steps.
Anchor the claim in the written contract
The written agreement was the foundation, so we started there. Its final version stated in unambiguous terms that the receivables billed before closing belonged to our client and that the buyer’s role was to help collect them, not to keep them. Because Nevada law governed the contract and the language admitted little room for interpretation, the breach was clear on its face. Alongside the breach-of-contract claim, we asserted breach of the implied covenant of good faith and fair dealing, directed at the buyer’s refusal either to remit the funds or to account for what it had collected—conduct that went beyond a simple failure to pay.
Add remedies designed to reach the money
A judgment is only as good as the assets available to satisfy it, and here the buyer had already collected the funds and stopped engaging. To avoid winning on paper alone, we pleaded conversion for the buyer’s wrongful retention of money that belonged to our client, and asked the court to impose a constructive trust and equitable lien over the proceeds and anything traceable to them. Those remedies would let us follow the funds rather than pursue an empty judgment. We also sought declaratory relief fixing the parties’ rights under the agreement and pursued punitive damages—measures that raised the buyer’s exposure and made continued resistance far more costly than resolution.
Press the litigation toward a settlement
From there, the case moved through sustained motion practice. Each stage tested the buyer’s position and steadily narrowed the dispute, and as the strength of the contract claim and the reach of the equitable remedies became apparent, the buyer’s calculus shifted. Working through counsel, we negotiated a resolution above $550,000, reached in under a year. Our client recovered the value of what they were owed without the expense, delay, and uncertainty of a trial, and the buyer avoided the greater exposure it faced if the case ran to judgment.
04. The outcome
The matter resolved in a settlement of more than $550,000, negotiated between counsel and reached in under a year. For our client, the figure represented exactly what the litigation had been about: the return of revenue the client had earned before the sale and been denied. A demand that had gone unanswered for months became a concrete, enforceable recovery.
The result carried significance beyond the sum itself. It affirmed that the allocation our client had negotiated was not a formality—that a buyer cannot absorb, by inaction, the assets a contract expressly reserves to the seller. The timeline mattered as well. Resolving a multi-count commercial dispute in under a year, through sustained motion practice, spared our client the years-long trajectory such cases often follow, along with the cost and uncertainty that come with them.
Perhaps most meaningful was the end of the impasse. Rather than continuing to pursue an unresponsive buyer, our client closed the matter and received what they were owed. The outcome turned on strategy as much as merit: pairing a clear contractual right with claims engineered to reach the funds gave the case the leverage that made settlement the buyer’s most sensible course.
05. Key takeaways
Clearly define who owns accounts receivable before the sale closes
In any sale of a business, specify who keeps the accounts receivable outstanding at closing, and put that allocation in the purchase agreement itself. A clear written term, rather than an understanding reached in conversation, is what makes the money recoverable if the buyer later declines to hand it over.
Winning a contract claim does not always guarantee you'll recover the money
Prevailing on a contract is not the same as being paid. When a buyer has already taken funds that are yours and stopped responding, a breach claim alone may yield only an uncollectible judgment. Equitable remedies such as conversion and a constructive trust can let you trace the money and reach whatever it was converted into.
A well-documented contract can create early settlement leverage
A strong case need not be a slow one. Where the contract is clear and the claims are well constructed, the merits themselves generate leverage—often enough to resolve even a multi-count commercial dispute in months rather than through years of trial.
06. FAQ
Disclaimer
This case study is provided for informational purposes only and is presented in anonymized form to protect client confidentiality. Identifying details have been altered or omitted. It does not constitute legal advice and does not create an attorney-client relationship.
Prior results do not guarantee or predict a similar outcome in any future matter. Every business transaction and commercial dispute depends on its own facts, contractual terms, and applicable law. Dollar figures are stated as conservative, rounded-down ranges to help protect client confidentiality.
Attorney Advertising. Licensed in Nevada and California · Milan Chatterjee, Esq.
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