Who owned the invoices collected the month after the sale closed

The situation

Three months after the sale closed, Ildiko called us because roughly two hundred thousand dollars in customer payments had landed in the buyer's bank account, and she believed most of that money belonged to her and her former business partner, not to him. To understand why that question was even open, and why it took months rather than days to sort out, it helps to go back to how the sale came together in the first place.

Ildiko and Erzsebet had co-owned a St. Thomas engineering and construction firm for over a decade, a business generating several million dollars in annual work with a mix of municipal and private contracts across the region. Ildiko, a construction project manager, wanted to retire from active ownership and had been saying so for a couple of years. Erzsebet, a professional engineer who had built much of the firm's technical reputation and its relationships with municipal clients, did not want to sell at all, and made that clear throughout the negotiation, arguing at several points that the business still had years of growth left in it. Their shareholder agreement gave Ildiko the right to force a sale of the company after enough years of joint ownership, a right she chose to use once a buyer, Radu, made a serious offer that reflected the firm's real value.

The purchase agreement set the closing date around a specific mechanism: receivables outstanding as of closing would belong to the sellers and be collected on their behalf by the ongoing business, while any work billed after closing would belong to Radu's new ownership outright. A holdback was set aside from the purchase price specifically to cover any receivables that could not be cleanly sorted at the moment of handover, to be released once the accounts were fully reconciled between the parties.

What complicated the reconciliation was timing outside anyone's control. The sale could not fully close, and the corporate wind-down steps that followed it could not proceed, until the company received clearance certificates from the relevant provincial and workplace safety authorities confirming no outstanding obligations remained on the corporation's record. Those certificates took months longer than anyone expected, and during that gap, customer payments kept arriving on ongoing projects, deposited automatically into whichever account was now the operating account, which was Radu's, regardless of who the work had actually been billed by.

What was actually at stake

The dispute looked, on its face, like an accusation that Radu had simply pocketed money that was not his. The reality was more tangled than that. Some of the roughly two hundred thousand dollars in question genuinely was payment for work billed before closing, and belonged under the agreement squarely to Ildiko and Erzsebet. Some of it was payment for work substantially performed before closing but invoiced only afterward, a category the agreement had not defined with enough precision to sort automatically once real money was on the table. And some of it was payment for new work Radu's team had performed entirely after taking over, which was unambiguously his under any reading of the deal.

What made this worth taking seriously, rather than dismissing as a routine bookkeeping delay that would sort itself out, was the amount at stake relative to the holdback the parties had actually agreed on. The holdback set aside at closing was smaller than the disputed receivables total, which meant that if the full amount Ildiko believed she was owed turned out to be correct, there was not enough money held back to cover it, and Radu would have had to pay some of it out of funds he had already spent integrating and running the business he now owned.

There was also a structural problem underneath the dispute that made it harder to resolve cleanly. Erzsebet, who had never wanted to sell in the first place, was noticeably less inclined to compromise than Ildiko was once the disagreement surfaced. Her position was that the ambiguity in the invoicing timeline should be read in the sellers' favour across the board, since the buyer's side had drafted the reconciliation mechanism and any gap in that drafting should not benefit him. Ildiko, wanting the matter resolved so she could move fully into retirement, was more open to a middle ground, which meant the two sellers were not entirely aligned with each other even as they faced the buyer together.

The clearance certificate delay sat over all of it like a ceiling nobody could raise. Until those certificates arrived, the holdback could not be formally released to either party regardless of what the parties themselves agreed between them, because the sale agreement had tied release of the holdback directly to completion of the corporate wind-down steps those certificates were a required part of. Every negotiation session, every proposal and counter-proposal, took place against a backdrop of a government process moving at a pace nobody in the room actually controlled or could meaningfully accelerate.

What we did

1. Requested the full transaction ledger from Radu's bookkeeper, covering every customer payment received in the three months after closing, matched against the invoice date, the work date, and the underlying customer file, since a dispute involving this much money could not be resolved on recollection alone and needed a complete, verifiable paper trail before anyone made an offer. We cross-referenced that ledger against the sellers' own pre-closing books, kept separately by Ildiko's former accountant, so neither side was relying solely on records the other side controlled.
2. Sorted the receivables into three distinct categories, work billed and substantially complete before closing, work performed before closing but billed only after, and work performed entirely after closing, because the purchase agreement treated each category differently under its terms and lumping them together was the actual source of the disagreement. We built this out customer by customer using site logs and project completion records, not just invoice dates, since the two did not always line up.
3. Identified the true gap in the agreement's drafting, which was the middle category, work done before closing but invoiced afterward, and researched how courts and negotiated settlements typically treat that kind of ambiguity in practice, generally by looking at when the underlying obligation to pay actually arose, meaning when the work was substantially performed and the customer became liable to pay, rather than when the invoice happened to be issued or paid.
4. Brought Erzsebet's position into the negotiation directly and early, rather than letting it surface as a separate dispute later, since a settlement that satisfied Ildiko but that Erzsebet later challenged in her capacity as co-seller would not have actually resolved the underlying problem at all. That meant a joint call with both sellers before any number was floated to Radu, so their own disagreement about how hard to push could be worked through privately first.
5. Proposed an allocation formula based on when work was substantially performed, rather than strict invoice date, which gave the sellers the receivables tied to work genuinely completed before closing regardless of any billing delay, while still confirming Radu's clear entitlement to anything for authentically post-closing work. The formula used percentage-of-completion figures drawn from the same project records used to sort the categories, so the allocation was not a rough guess but tied to numbers both sides could independently verify.
6. Tracked the clearance certificate applications separately from the receivables talks, following up periodically with the relevant provincial and workplace safety offices, so the parties knew roughly when the formal holdback release could realistically happen even while the receivables negotiation proceeded on its own faster timeline. Keeping the two processes visibly separate also helped in negotiations, since it meant no one could use the slow certificate timeline as an excuse to stall the receivables settlement itself.
7. Documented the negotiated split in a standalone signed settlement agreement, distinct from the original purchase agreement, so the resolution stood on its own regardless of how long the certificates took to eventually arrive, and released the disputed funds from Radu's account according to the agreed formula rather than waiting for the slower holdback process to catch up. Both sellers signed personally, closing off any later argument that one of them had not actually agreed to the terms.

The outcome

The sellers recovered a substantial majority of the disputed receivables, allocated according to when the underlying work was actually performed rather than when it happened to be invoiced. Radu kept the portion clearly tied to work his own team had genuinely done after taking over the business, and neither side walked away with everything they had initially claimed at the start of the dispute. Erzsebet, in particular, had wanted the full amount on principle and accepted the eventual compromise only once it was clear that pursuing more through a formal dispute would have cost more in time and legal fees than the actual difference at stake, especially with the clearance certificates still stuck in process.

The certificates themselves arrived a few months after the receivables settlement was already signed, releasing the original holdback according to the terms of the sale agreement, by which point most of the practical dispute had already been resolved through the separate settlement. The two processes ran on entirely different clocks and never fully converged, which is a large part of why a standalone settlement agreement mattered here: it let the receivables issue close on its own terms without waiting on a government timeline neither party could realistically speed up no matter how many follow-up calls were made.

Ildiko moved into retirement with the matter genuinely behind her, which had been the point of forcing the sale in the first place. Erzsebet stayed on with the business in a reduced advisory capacity under the new ownership, an arrangement the original sale agreement had contemplated from the start given her value to the firm's municipal clients, and the receivables dispute, while genuinely uncomfortable for everyone while it lasted, did not end up derailing that ongoing working relationship going forward.

For Radu, the settlement also drew a clean line under his own exposure. Without it, he would have kept fielding informal claims from either seller months or years after closing, each one requiring him to reconstruct records from a period he had not yet fully absorbed into his own bookkeeping. A single signed agreement covering every disputed dollar meant he could finish integrating the business without a dispute still sitting over its books, which mattered to him nearly as much as the figure itself.

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