$1m on the line - what can be done?
In short, Person A had setup Company A and due to fund shortages and market conditions, they were unable to run it properly. Then comes in Person B, the owner of Company B, who would supply raw material to Company A during their operations. Person B suggested that he would be happy to take over the entire facility setup by Company A on a rental basis and will pay the owners of Company A a monthly rent and in exchange, Person B will run Company A as he wants and no interference will be done by owners of Company A and they will have no say or part in any profits or losses.
Because owners of Company A trusted Person B, they made him a Manager on their license and essentially handed over the keys of the facility to Person B and gave him $500,000 to run it. Person B gave security cheques from his company (Company B) in the name of Company A as a form of security.
Person B gave rent for a few months before stopping it and then did not renew the license for Company A, and the owners had no capital left to do anything about it. Now, Person B has stopped paying the landlord, has made a mess of the facility which had cost the owners of Company A approx $500,000 to build, and Company A has received a call from the landlord to remove everything from his land.
Owners of Company A now have limited time to do something about their facility, have no cash to deploy, license has expired, landlord has increased the rent 4x, bank account has been dormant, and therefore any and all cheques given by Person B are essentially just pieces of paper.
Owners of Company A have cheques for 10 years as well as a security cheque for $500,000 however, given the current situation, they can't do anything about it and it looks like Person B has no intention of paying what he took.
Is there anything that can be done or should owners of Company A assume that they have lost everything?