the sellers. Thus, the buyers anticipated that they would have to rely upon income generated by the business to pay operating costs and to pay down the purchase debt.
Between December 1996 and March 31, 1997, the buyers entered final negotiations to purchase Abacor, and towards that effort, they hired attorney Jeffrey Saunders to draft an asset purchase agreement. On January 10, 1997, Saunders wrote to the sellers' counsel, requesting financial documents for the completion of due diligence, including Abacor's financial statements for the years 1993 through 1996 and all work papers related thereto. However, the work papers showing that a large portion of Abacor's receivables were over 90 days old and older and that Abacor's financial performance had entered a dramatic tailspin for the last three quarters ofdelay in the release of a product upon which Abacor depended for a large portion of its revenues. James *363 assured the buyers that the 1996 figures were aberrational, that the drop in revenue was not part of a downward trend, that the first quarter of 1997 would be strong, and that Abacor was on track to do better in 1997 than in 1996. Due to the sellers' poor financial record-keeping and failure to keep current accurate financial information on hand, James had no direct knowledge as to the truth or falsity of the representations he made about Abacor's continuing good performance. The representations were essentially based on James' "gut feel" about Abacor's performance.
The sale was scheduled to close on March 31, 1997. During the period leading up