Your buyers agent is best resource review the contract terms and conditions.

Short sale requires lender approval for seller sale the property

Best work in concert with your agent, if not move on to another property request for earnest money returned. You can also confer with real estate attorney

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Lynn911

generally speaking, if the owner of the property has filed for bankruptcy and the property remains tied up in bk court, then he can't convey clear title, and has defaulted under the contract. no title company will be able to insure over this. the buyer could sue for damages I suppose, but query what damages they have/can prove. alas, your deal has fallen apart, and if you are on the buy side, it's time to move on.

To find out if you have any legal recourse, you'd need to consult a real estate attorney. But sometimes, you are just better walking away and finding another house.