Accidentally sold iPhone 4 with bad esn?

Okay, so long story short I had Verizon and an iPhone 4. We switched to AT&T so logically I had no use for a Verizon phone so I resold it. Evidently since we canceled Verizon mid contract, they put the phone on blacklist until November 16th when the accounts billing cycle is up. I had NO IDEA when I sold the phone that this could happen - I thought if you just canceled the service you're free to go as long as you pay the current bill & any money you owe the service provider. Anyway, the phone will definitely be able to be activated on the 16th but not before then. The guy I sold it to is now coming at me saying he's going to file a police report, take me to court, ruin my life etc. What do I do?

Just calmly explain the truth to him. I don't see why it would be hard to understand. But if that doesn't work just ask him if he wants his money back. Tell him if after the 16th it doesn't work then you will give him his money back.