Legal Question in Business Law in California

Re: Bankruptcy-A Material Breach of Contract?

The answer to your question depends on a number of factors such as what the subject of the contract is. However, even if a bankruptcy filing is a material breach of the contract, any remedies you may have against the breaching party might be discharged by the bankruptcy proceeding. Generally, once a bankruptcy is filed, the Bankruptcy Court issues an order that prohibits anyone from attempting to collect any debt from the person (or company) that filed the bankruptcy, without the court's approval. Hence, if the material breach would otherwise ultimately lead to a money judgment, you would be required to ask the Bankruptcy Court for permission to pursue your claims against the breaching party; if this debt is "unsecured," the court would probably not give its permission.

Without knowing far more about your particular situation, it would be almost impossible to determine whether the filing would be a "material breach," and more importantly, whether you could pursue any of your remedies against the breaching party.

You should probably have an attorney look at the contract at issue, and discuss all of the facts of your case. Our firm would be happy to discuss this matter with you further. If you would like to arrange for an initial client consultation, our office can be reached at (714) 997-9222. We would charge a fee of $65.00 for an initial consultaiton, unlimited in length.

Re: Bankruptcy-A Material Breach of Contract?

Whether or not the filing of a bankruptcy petition would constitute a Material Breach of a Contract would depend upon several factors:

Does the filing of the bankruptcy petition frustrate the purpose or goals of the Contract? Does the filing of the Bankruptcy Petition interfere with the ability of the parties to otherwise perform on the Contract?

In short, I would need more information in order to give you an answer. Feel free to contact me by e-mail.pdm