Bankrupt Party Wants to Buy 1 of 10 Items Held for Anticipated Court-Ordered Payment

[James Andersen]

A bankrupt party wants to pay for 1 of 10 custom ordered units they were unable to pay for before going bankrupt, and would want me to deliver that unit while continuing to store the remaining units until a court-approved payment is made for them.

What would happen if I sell the requested one (1) unit, and can I set a new price for that unit if I do decide to sell it?

Would I lose any collection rights on the remaining nine (9) units, and what are my rights and obligations with regard to the any unit left in storage - and the customer's payment for such?

This case is handled through the United States Bankruptcy Court, Southern District of New York, and I am in Illinois.

Thank you.

 

[cacreditor]

I would have them reaffirm the debt which will survive the bankruptcy. consult your attorney

 

[JETX]

What would happen if I sell the requested one (1) unit

The Trustee could demand that you repay the funds paid... since it could be considered a 'preferential' payment. Have the buyer get the permission of the trustee FIRST.

and can I set a new price for that unit if I do decide to sell it?

Depends on the specifics of your original purchase agreement... and the permission of the trustee.

Would I lose any collection rights on the remaining nine (9) units, and what are my rights and obligations with regard to the any unit left in storage - and the customer's payment for such?

Again, get that clarified by the Trustee. Simply, the debtor/buyer can't enter any new contracts or amend any existing ones without the approval of the bankruptcy court.

 

[James Andersen]

Thank You

Thank you cacreditor and JETX. It seems you just helped avoid a small catastrophe. I appreciate your wise input.