What happens if I find out the seller has been personally sued over the business?

It's worth understanding exactly what the claim is about and against whom, since this affects both risk assessment and deal structure. A claim against the seller personally, rather than against the corporation, suggests the underlying issue may relate to something the seller did in a personal capacity — a personal guarantee, a dispute unrelated to day-to-day operations, or an allegation of personal wrongdoing — rather than an ordinary business liability, though the line between the two isn't always clean, especially in an owner-operated business where the individual and the corporation are closely intertwined in practice.

If you're buying shares, a claim against the seller personally generally doesn't transfer to the corporation just because ownership changes, but if the claim actually concerns the corporation's business or could result in the corporation being named or affected, it deserves the same scrutiny as any other litigation exposure. If you're buying assets, personal claims against the seller are even more clearly separate from what you're acquiring, though they may still affect the seller's ability to close, or their financial stability through the transaction.

Ask for full details and assess whether it's truly personal or connects back to the business itself. A Treadstone business lawyer can help sort out which risk actually belongs to your deal.