Week-End ReviewNCS Credit - October 03, 2014
Here are just a few of the great articles that caught our eye this week!
An article via The National Law Review: Mechanics Lien Subordination: Illinois Further Limits Construction Lenders’ Ability to Ensure Priority against Mechanics Liens
- Here’s why we shared the article: SB3023 is another step in further protecting the rights for mechanic’s lien claimants. The lender on a project is still able to request subordination of mechanic’s liens; however, the lender must wait until 50% of the construction loan proceeds have been disbursed.
“…which amends the Illinois Mechanics Lien Act (770 ILCS 60/ et seq.) (the “Act”) to prohibit subordination of mechanics liens on Illinois construction projects, unless such subordination is to a construction mortgage lien made after 50% of the construction loan has been disbursed to fund construction costs…”
A blog from Weil’s Business Finance & Restructuring: “Court Denies Administrative Priority Status to Seller Whose Goods Were Not Received by the Debtor”
- Here’s why we shared the article: It all comes down to the definition of received. What does it mean for a debtor to have received goods, under section 503(b)(9)? In this particular case, the creditor shipped the goods to their debtor’s customer, and even though the goods were sold during the 20 day period before the debtor filed bankruptcy, they were not “received” therefore the creditor was not permitted to administrative priority treatment.
“…section 503(b)(9) of the Bankruptcy Code, which affords a creditor administrative priority for the value of goods the debtor received within 20 days prior to its bankruptcy filing, has been the subject of many bankruptcy decisions. The express language of section 503(b)(9) has come under heavy scrutiny, with much of the litigation surrounding section 503(b)(9) focusing on what constitutes a “good.”…”
An article from GOVERNING: How Rare Are Municipal Bankruptcies?
- Here’s why we shared the article: Although this article is from 2013, it has a terrific interactive graphic which depicts how each state handles municipal bankruptcy. The map has four categories: states specifically authorizing Chapter 9, states that authorize Chapter 9 upon certain conditions, municipalities that have limited authorization and those states with no Chapter 9 authorization or laws are unclear.
“…The degree to which laws limit Chapter 9 filings varies greatly from state-to-state… 12 states specifically authorize Chapter 9, while 12 others permit bankruptcy filings given a further action taken by a state, official or other entity…”
Last, but certainly not least, we posted a new blog A Contractor Supplied a Payment Bond for a Project. You…A contractor supplied a payment bond for a project. You…
- supplied materials to the project
- served a preliminary notice as required by statute
- have not been paid