Three scenarios:
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A small business closes a division but still exists as a going concern. Say, a CD store and a video store are owned by the same guy. The guy closes his CD store but the video store remains open, both are under the same company name. That company is still obligated to close out open orders for CDs, correct? Must it refund people’s money who pre-ordered or back ordered CDs and paid but will never receive product?
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A small business shutters completely but is not bankrupt. Can it walk away with customers’ money in that situation? So you pre-order a CD from this store and when you go to pick it up, they are shuttered permanently. An owner can’t just walk away with cash, can he? In the absence of a bankruptcy filing, is he obligated to pay all his financial debts, from employee pay to customer refunds to leases, etc?
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Company actually does close and is bankrupt. I understand that in bankruptcy there is a “line” involving creditors and investors and such, but I’ve never heard where in the line customers are. If a customer pays for a product or service at a future date and it is not provided because the company went under, how far in the back of the line is the customer?