Legal Question in Business Law in Texas
Honoring of a contract
I have a contract with a non-profit Youth Soccer Association as a coach - the association is under investigation from the IRS - if they were to declare bankruptcy or be shut down - would my contract still be honored - and if so, who would pay me. The contract is for about twenty five thousand dollars.
thanks for your time
1 Answer from Attorneys
Re: Honoring of a contract
If the Association goes into bankruptcy, your contract may be voided at the bankrupt's discretion, and you will be standing with the rest of the unsecured creditors for whatever portion of your contract that you earned. If they choose to renegotiate your contract, then the trustee will pay you from the bankrupt's estate.
If they're shut down by the IRS, no one will pay you.
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