We recently received word that a building contractor, who we have worked with for years, filed bankruptcy. We performed work on one of their homes as recently as 2 weeks ago. After getting the runaround from the builder, we contacted the homeowner to pursue payment for said services, and in turn, we found out the he had already closed on the property (new construction). He also informed us that the builder filed a lien waver at closing, claiming that all subcontractors had been paid in full. The lien waiver releases the homeowner from any financial liability.

The builder pursued our services without informing us of his impending bankruptcy and proceeded to falsify documents at closing that would prevent any of his subcontractors from receiving any remaining money that was owed to them. He requested our services with no intention of rendering payment whatsoever. Anyone know if there's any chance of retribution in this case without attempting to drag this out in court, or if we would even have a case due to the bankruptcy, etc?


I searched, but the old lien related threads weren't really relevant and / or past 90 days

11/6/2008 2:21:09 PM

your first action should be to consult with a lawyer and not tww

11/6/2008 2:22:28 PM

That is on the books for next week. I was hoping someone had some sort of experience with a similar situation, but I do appreciate your insightful response.

11/6/2008 2:24:27 PM

what chapter of bankruptcy did they file... 11?

11/6/2008 2:27:56 PM

Quote :

"Anyone know if there's any chance of retribution in this case without attempting to drag this out in court..."

baseball bat + knee caps = $$$

[Edited on November 6, 2008 at 2:35 PM. Reason : ]

11/6/2008 2:30:42 PM

^^We didn't receive any official notification of the bankruptcy; we had to hear about it from someone else. The builder has more or less blown us off and hasn't provided us with any details of the bankruptcy unfortunately.

^hah, too bad there's no money in the kneecaps

11/6/2008 2:37:07 PM

definitely talk to an attorney...

you have 120 days from the last day furnishing labor or materials on the property to file a claim of lien
180 days from the last day furnishing labor or materials on the property to file a complaint to perfect the claim of lien

since property has been sold, this may involve a title insurance company. since there's a bankruptcy proceeding it would probably involve a motion to stay the bankruptcy for what you're owed. an attorney, and quickly, is definitely the route to take.

[Edited on November 6, 2008 at 2:41 PM. Reason : adf ]

11/6/2008 2:38:25 PM

unless you have given the contractor your own lien waver, he still owes you the money. he just fucked you by giving the homeowner his lien waver because I believe that absolves the homeowner from owing you anything.

he likely did that so the owner would pay him his final check. you will have to sue the contractor.

[Edited on November 6, 2008 at 2:45 PM. Reason : .]

11/6/2008 2:44:42 PM

Thanks for the input elkaybie. The heads of both of our divisions with money at stake are meeting with an attorney next week to discuss our options. Fortunately, payment for the majority of our work performed on this project has been received, as it was completed several months ago. This was more or less a last ditch effort to get a relatively small amount of work for free, in the days approaching closing.

The subcontractors who are at the tail end of the construction schedule will likely be the ones to suffer the greatest from this whole fiasco. For us, I'm guessing it will ultimately be a cost of court / headache vs. outstanding balance type of decision. At the very least I'm sure we will attempt to place the lien and see if the waiver holds up.

^yeah it was a very underhanded thing to do, particularly considering we've had a working relationship with these people for several years

[Edited on November 6, 2008 at 3:02 PM. Reason : .]

11/6/2008 2:53:58 PM

Yeah, this is a retarded move by the contractor. It's one thing to go bankrupt, it's another to completely ruin your working reputation and burn bridges with former business partners. Not to mention trying to run and hide from your debts. Let us know how this turns out. Good luck.

11/6/2008 3:11:24 PM

Quote :

"I'm guessing it will ultimately be a cost of court / headache vs. outstanding balance type of decision. "

fuck that.. sue the hell out of the contractor. you can usually recoup court costs and lawyers fees if you win.

11/6/2008 3:30:43 PM

^ assuming he has any money, which he probably doesnt since he filed for bankruptcy, judgements are worth shit if there is no money

11/6/2008 3:47:46 PM

^That's my biggest concern....spending money on an attorney / court costs for what would likely be a 'milking a dead cow' scenario.

11/6/2008 4:01:02 PM

/

[Edited on November 6, 2008 at 4:30 PM. Reason : .]

11/6/2008 4:30:09 PM

definetly file a contractors lien on the title as quickly as you can if possible..it will get the owners interested in helping you solve your problem atleast

11/6/2008 9:36:54 PM

all these builder guys have LLCs, one of our best clients had a different LLC for each subdivison he did. we had several blow away with the wind when things went bad, and you may be in the same boat. might have to go back to the old barter system, ie go take some shit.

[Edited on November 6, 2008 at 9:43 PM. Reason : break finger first]

11/6/2008 9:42:29 PM