Will the bond company just pay him or will they require proof he perfected the lien? Will I get a say in the matter? HOW DOES THIS PROCESS WORK? My sub did not "perfect the lien" per Texas laws as he did not send out notices of any sort. At what point can I get my $$ back from the bond?
You really should retain a construction attorney to review and evaluate your legal position based on the contract and pertinent documents. The right to be entitled to file a mechanic's lien is set out in Texas Property Code Chapter 53, and you really need to make sure that the lien was properly and appropriately filed.
Filing an invalid lien could subject the lien filer to liability under the Texas Fraudulent Lien Act, and the lien filer could be liable for statutory damages of $10,000, or actual damages, whichever is greater, plus attorney's fees.
The legal analysis would start with a review of the nature of the project (residential, commercial, or homestead), and then extend to the contract, the payments issued to the original contractor, the notices received from the subcontractor, and your position in the contracting hierarchy.
When a surety issues a bond to indemnify lien, the surety makes no decisions as to payment. The lien claimant would have to sue on the bond within one year of notice of bond filing. If you had to post collateral to secure the bond, you should be able to recover the collateral after the statute of limitations has lapsed on the ability to sue on the bond.
Good luck.