If a seller discovers a buyer is insolvent, the seller must continue to ship contracted-for goods to the buyer until the bankruptcy court issues a formal declaration of insolvency.

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If a seller discovers a buyer is insolvent, they are not required to continue to ship contracted-for goods to the buyer. In fact, it may be wise for the seller to halt shipments and consult with a lawyer to protect their own interests in such a situation.

If a Seller Discovers a Buyer Is Insolvent, the Seller