My investor has a promissory note from a dev. that went under how does he get his money back? Lein?

Question

An investor gave money to a developer for a project and in return was given a promissory note. The project went under, what options does my investor have? Developer is thinking he is walking away clear and free since it was a flop.

Answer 1

The answer depends upon the terms specified in the promissory note.

If the note specified that the note would be paid by funds generated by the project, the investor is probably out of luck unless he can demonstrate that the developer acted fraudulently.

If the note simply specified that the developer would pay back the loan, the fact that the project failed is not material and the developer still must repay the note.

I would stongly suggest contacting a local lawyer to review the note and explain what options the investor has.