When anyone sells a name it should go without saying that it is not the subject of a C&D. If someone receives a C&D and then sells a name, I'd regard that as bad faith whether I asked them about it or not. At the same time, in this case we don't know if the seller had received a C&D or not.
It is important to be careful of fake C&Ds from fraudsters who claim to be a TM holder, but actually just want to get their hands on the domain.
When you say the name is at Sedo, do you mean that they haven't updated the DNS and you are still receiving revenue?
I'm sure "out of pocket expenses" just means the reg cost ($7 or whatever). Not worth bothering with if you ask me.