Purchased and paid for, but still not secured against the seller's bankruptcy

The law firm Halvorsen at Trine Glorvigen represented a bankruptcy estate with questions about legal protection for the sale of two excavators before the opening of bankruptcy proceedings was established. The estate was upheld by the Court of Appeal that legal protection had not been obtained. On November 10, the Supreme Court denied the buyer’s appeal. The case shows that purchase and payment are not always enough if the seller goes bankrupt.

Legal protection when buying machinery and accessories

The main rule regarding the purchase of intangible property is set out in the Supreme Court’s decision in Aurstad Maskin (HR-2021-2248-A). The Supreme Court imposed a requirement that the seller be deprived of the right to dispose of the item in order for the buyer to be protected against the seller’s creditors (legal protection). This is done by depriving the seller of the ability to use or dispose of the item.

A valid purchase agreement and payment are therefore not in themselves sufficient to protect the buyer against seizure from the seller's bankruptcy estate. Something more must have happened.

What was the case about?

The dispute concerned two excavators that had been sold to the buyer several months before the seller went bankrupt. The bankruptcy court held that the buyer had not obtained legal protection, as the seller still had control of the machines. The bankruptcy court therefore seized the machines and sold them. The buyer claimed compensation and the return of the machines, but lost the case.

Both the District Court and the Court of Appeal upheld the bankruptcy proceedings. The Court of Appeal, in 26-004718ASD-ELAG, held that the buyer had taken over ownership of the excavators, but did not secure legal protection. The machines remained in the same locations before and after the transfer, and no practical changes were demonstrated that deprived the seller of control. Agreements, accounting records, and information to the insurance companies were not sufficient to deprive the seller of control. Leasing company purchases were also insufficient to deprive the seller of control.

The Supreme Court's appeals committee denied the appeal submitted

On November 10, 2026, the Supreme Court’s appeals committee decided that the appeal should not be filed, cf. HR-2026-2409-U. The Court of Appeal’s judgment thus remains in effect. With this decision, the Supreme Court has determined that the rules of legal protection as they are set forth in Aurstad Maskin remain the applicable law.

What does the Supreme Court’s decision mean for your business?

The case illustrates that legal protection must be ensured specifically when purchasing machinery and other accessories. This also applies if the seller goes bankrupt some time after the purchase has been concluded. As a rule of thumb, the decisive factor is whether the seller has actually been deprived of possession, not only whether the purchase has been agreed upon, paid for, and documented. Legal protection can be achieved, for example, through the physical transfer of the assets from the seller to the buyer.

Contact us for assistance

The law firm Halvorsen advises companies that are planning to buy or sell larger machines or equipment, so that both parties are sure that the purchase proceeds as smoothly as possible and that it is not seized by the seller's bankruptcy estate if the seller subsequently goes bankrupt.

We also assist if the seller has already gone bankrupt, the bankruptcy estate demands that the equipment be returned, or there has been a dispute about who is entitled to it.