One Reason to Enforce Payment Bond and Mechanic's Lien Rights Promptly


There are many reasons why a party to a construction project should promptly file a payment bond claim or a mechanic's lien claim when those rights mature. The U.S. Court of Appeals for the Fourth Circuit recently emphasized this point in the bankruptcy context. In United Rentals, Inc. v. Angell, the Fourth Circuit upheld a bankruptcy court judgment allowing a bankruptcy trustee to avoid and recover $66,963.74 as preferential payments made by Partitions Plus of Wilmington, Inc. to United Rentals, Inc. during the 90 days prior to Partitions' bankruptcy petition. At issue was United's failure to make a payment bond or mechanic's lien claim prior to receiving Partitions' payments, which the Fourth Circuit determined was fatal to United's argument that the payments

were contemporaneous exchanges for new value because they extinguished United's right to enforce its claims. Jack B. Boyd of Ober|Kaler takes a look at the case.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Baker Donelson | Attorney Advertising

Written by:


Baker Donelson on:

Popular Topics
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.