After the filing of a third party claim, upon motion of the creditor, debtor, or third person, the court may make an order staying the sale of the property under a writ or enjoining any transfer or other disposition of the property levied upon under a writ until proceedings for the determination of the rights of a third person can be commenced and prosecuted to termination. (CCP 720.380)
Unless the levying officer is served with a court order, the right to a hearing, or fact that one is pending, has no effect on property being held under the levy. The property should be sold, delivered, or released based on whether or not proper undertakings have been filed, and justification of sureties has been completed or waived. However, it would be prudent to continue to hold the property upon receipt of a court order determining the claim or sufficiency of the undertaking.