GC sends a joint check to the sub’s PO Box and the Sub’s secured lender cashes the check without endorsement.
I am a material supplier. My customer is a subcontractor and or general contractor on many jobs. My customer goes bankrupt. I inform the GC’s and property owners to send a joint check. Many of them send joint checks to the subcontractors PO Box for payments. It turns out the PO Box is controlled by the subcontractors secured lender. The secured lender cashes the checks without proper endorsement from the material supplier. The secured lender claims the money was theirs as they had a first lien on the subcontractors receivables. What happens now? I am now in a position to file liens on projects where the end customers has already paid for the materials via a joint check.