Legal Question in Business Law in New York

Bankruptcy

Ok so i recently started my own record label with my partner....we entered a distribution deal with a distributor based in the UK ...about a month or two into the contract they went bankrupt due to a parent company the contract does not state any stipulations about this matter months later we signed a new deal and now we recieved a letter from another company saying they bought our original contract ...however we are happy with our new distribution ..so i was wondering if bankruptcy was cause for opting out of a contract


Asked on 3/11/08, 12:36 pm

1 Answer from Attorneys
John Friedman Law Office of John K. Friedman

Re: Bankruptcy

It depends on the contract language itself. Bankruptcy is often dealt with in the contractual language -- though it is often only concerned with the label's bankruptcy, not the distributor's. You should immediately review the contract language for any clause(s) dealing with the issue. If it is silent, you will need to determine what law controls (US or UK) -- contracts, especially between parties from different countries -- typically state which law controls. If the contract is silent on the bankruptcy issue then the controlling law will determine the outcome. If the contract is silent on the controlling law they more research is needed.

You should bear in mind that anything can be negotiated so if the contract language doesn't provide clarity, or even if it does, you may be able to negotiate an acceptable outcome with the purchaser.

If you'd like to discuss your options I am happy to provide a telephone/videophone consult with you at no charge. You may reach me at 646.823.4630 (voice) or on Skype at johnkfriedman (voice and video).

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Answered on 3/11/08, 12:49 pm


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