The plaintiff purchased the assets of a restaurant and bar business and leased the premises from the corporate defendants.
After taking possession, the plaintiff discovered severe structural and plumbing deficiencies, including water infiltration and sewage backups, which the vendor had failed to disclose despite a contractual condition to ensure the premises were in a state of good repair.
The plaintiff sought rescission of the asset purchase agreement and termination of the lease.
The court found that the vendor breached the condition and made fraudulent misrepresentations regarding the state of the premises.
The court granted rescission of the asset purchase agreement, ordered the return of the $275,000 purchase price (subject to an accounting), and terminated the lease.
The action against the individual principal and the defendants' counterclaim for property damage were dismissed.
