Commercial Debt Collection: When Your Debtor Files Bankruptcy, Your Preexisting Judicial Lien on Real Estate Can Survive With Help

Cellai Law Offices, P.C. litigated a case at Middlesex Superior Court in Woburn, MA on behalf of its client against a debtor winding down its affairs.  The debtor took the position that the creditor, by submitting certain documents purportedly consenting to the winddown and purportedly being a participant in the winddown, consented to the winddown of the debtor and the reduced and prorated amount in the documentation.  When the debtor failed to proffered any winddown documents or a formal plan of winddown, although the documents made vague reference to a winddown, the debtor ultimately took the position that they as debtor were only obligated to pay the creditor on the reduced and prorated amount stated in the winddown document.  After trying the case to a jury for a week at Middlesex Superior Court in Woburn, the jury agreed with Cellai Law Offices, P.C.’s position on behalf of the creditor that merely presenting a creditor with documents to verify or reconcile a debt and then playing coy with the creditor being bound into a winddown agreement was not going to bind the creditor into a winddown.  The lesson to the creditors is to be vigilant about what you are signing when a debtor asks you to sign any documents.