Expert: Terry Leeders - 6/20/2008

Question
My friend is in the process of having a house built.  It is almost finished but her builder just received a letter from the IRS stating that the company where the kitchen cabinets were purchased and paid in full have been seized by the IRS.  Will she be able to get her cabinets since they have been paid for?

Answer
I am a little confused as to how this relates to bankruptcy.  Now, if the builder filed bankruptcy, they have to disclose contracts and major transactions.  The court could have the right to reverse certain transactions if they were in violation of the bankruptcy code.  Your friend should bring the documents you received to his/her real estate attorney to review to see what is up.  Your friend may have a claim in the bankruptcy case.  It is doubtful that the IRS or bankruptcy court will come and have the windows removed, as they are custom made, and wouldn't have much of an aftermarket if they were to be resold.  Your friend would then be able to get some money back if they do that though, and he/she would need to file a proof of claim.