Q. (cont.) We have either sold or closed most of our restaurants. Occasionally, invoices are sent to our company for payment that are 1-3 years old. Most of the vendors we no longer do business with or the restaurant is closed, so we cannot validate if the service was complete at the time noted on the invoice. Please advise on best practice.
A. Every state has a statute of limitations on debt, which varies by type. In many states, there is a difference between invoices levied against a written contract vs. those based on a verbal contract. However, Texas, for example, has a four-year limit on both types. Here is a table with this information by state: http://www.nolo.com/legal-encyclopedia/statute-of-limitations-state-laws-chart-29941.html.
As you can see, the shortest limits are two or three years, and for most states, it's longer than that, sometimes much longer. That means that the vendor can sue you under state law to recover the payment. Whether they choose to do so or not will probably depend on the value of the unpaid invoices.
Have you tried requesting proof of service for those open items? Some vendors may be able to provide that, say, a signed and dated work order, which could validate at least some of the open invoices.
Of course, if you or the individual restaurants are in bankruptcy, that is an entirely different matter which must be handled by the bankruptcy court.
However, we strongly recommend you consult an attorney or your in-house counsel on this matter. We are not qualified to give legal advice.