Seller is in bankruptcy, but his agent didn't disclose to me!

[Daniel Purcell]

Something I've never dealt with happened today: The seller is going through chapter 11 & 13 bankruptcy (and has been before we went under contract I found out) and his agent just informed me today of this. We were scheduled to close today, but they asked for an extension to 2/12 with a close on 2/14. Come to find out, the seller's bankruptcy lawyer dropped the ball somewhere (we aren't allowed to know where we were told) and we weren't able to close.

Come to find out the sellers agent knew about this the whole time but "forgot" to send us the information upon going under contract. She communicated it to the title company, but not to me. At no point in this process was I made aware of the bankruptcy until yesterday upon the sellers agent telling us we weren't able to close. 

Is there any legal recourse in terms of the money spent on inspections, appraisal, rate extensions, etc.? Or am I at the mercy of the bankruptcy courts? Also, if they seller has no money to put up because of the bankruptcy, what are my options even if I win a case against him?

Thanks as always!

[Bob Floss II]

@Daniel Purcell You can still close, the title company should have someone that can explain the process to you. They need to get a court order signed off by the bankruptcy judge to approve the sale of the property. It happens all the time. I've never had an issue with it, but it does take time to get the motion noticed up and in front of the judge. Depending on where they are in the bankruptcy process, it could take a few weeks or a month. Also, if the agent disclosed to the title company, it should have been reflected in the title commitment.