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Can I file a lien on secondary parties when our customer files bankruptcy.

South CarolinaBankruptcy

The situation: * We sold equipment we manufacture to a customer ("primary customer") who sold it to other parties ("secondary customers"). * We drop shipped the equipment directly to the secondary customers * Our primary customer filed bankruptcy * One shipment will be an Administrative claim. * Invoices remain unpaid * The secondary customers are located in New Mexico, Iowa, and Texas. * I would like to file liens on the secondary customers in these three states. I've done it before in Texas under the same circumstances and got paid. Can I do it in New Mexico and Iowa? *My primary customer resides in Texas. Your assistance is appreciated.

2 replies

Jan 28, 2022

We were an equipment or material supplier. 

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Jan 31, 2022

Mechanics lien rights for suppliers who provide materials other suppliers can be a tricky subject. And, much like other mechanics lien issues, lien rights for suppliers-to-suppliers will vary greatly on a state-to-state basis. 

Here's an article discussing how some states handle that issue, and it includes a helpful map breaking down situations in different states: Do Material Suppliers to Suppliers Have Lien Rights? At least according to that map, it looks like there's reason to be optimistic about lien rights in TX, IA, and NM.

Considering that this issue is a pretty unique one, and considering it spans multiple states - it might be more useful to raise these questions separately in each separate state here in the Levelset Community. That way, Community members in each state could weigh in with their insight. Also note that contacting a construction lawyer for legal advice could be useful, and we have directories of lawyers here: (1) Texas Construction Lawyers; (2) Iowa Construction Lawyers; and (3) New Mexico Construction Lawyers. And, if you do decide that legal help is necessary, Legal Guard from Levelset could make that help more accessible: Levelset Legal Guard.

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