What happenes to Warranties when the builder goes BK?

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When a builder goes BK, assuming Chapt 11, not liquidation, what happens to the warranties? Specifically,

Will the builder continue to honor the warranties while in BK?

Will the builder honor the warranties while emerging from the BK?

If other builders buy the company in BK court, will the new owner honor the warranties?

thanks!
 
It depends on the BK and what happens in BK court.

If it is just a restructing (Chapter 13), there should be no effects.

If it is a belly-up BK (Chapter 11), the BK courts basically sell the company's assets to the highest bidder. Previously-sold homes are not assets and thus cannot be sold. Generally, the owner is out of luck. You can still sue a BKed company (a corporation never really dies) but unless it has assets, insurance, or could find the contractor/subcontractors involved in the project, you are basically out of luck.
 
Are the subs legally binded to fix their work after the builder goes BK under chapter11? The subs have contracts with the builder not with the home owners.
 
Generally, one would sue the general contractors/developers and the GC/developer sues the subs.

Hypothetically, one could make an argument that a homeowner is a third-party beneficiary of the contract between the subs and general contractor but I have not seen a case where homeowners sue a sub directly.
 
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