Warranty Claims Against a Bankrupt Company
By L. Jed Berliner, Western & Central Massachusetts Bankruptcy Attorney on Jun 27, 2009 in Bankruptcy Practice and Procedure
You may have purchased something from a company now in bankruptcy, and you have to make a warranty claim.
If the company is in Chapter 11, it will very likely honor your claim for the good will it generates (you’ll tell your friends that it’s okay to do business with the company) even though the company may not have to, because your warranty contract existed before the bankruptcy was filed.
If the company is in Chapter 7, the buyer of the bankrupt company’s assets might honor your warranty claim for the same good will reason, even though it doesn’t have to.
Otherwise, you’re out of luck. This wasn’t a ripoff, this was just the bad luck of doing business with a company that didn’t make it. You’ve lost your warranty. The owners lost a significant asset, and the workers lost their jobs.
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