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Lien on open ended purchase of property

New YorkBankruptcyLien PriorityRecovery Options

I have a contract for purchase of assets that is open ended when i can take it out. The company then filed bankruptcy. The assets are worth upwards of 5-10 million dollars. Can I file a lien on the property even though the file bankruptcy?

1 reply

Oct 5, 2020

I'm not sure I fully understand the question. If you're referring to mechanics liens - a mechanics lien is generally only available against the project property where work is being performed. And, even then, lien rights are really only available to the extent that work is performed but not paid for. So, based on the above information, a mechanics lien might not be the most appropriate recovery tool for an unfulfilled purchase contract.

Further, unless the agreement or some other document or action has secured a lien against certain assets - security likely won't be present. It's pretty common for a UCC lien to be present with a purchase contract. But, after a party has gone into bankruptcy, it's likely too late to gain security.

Admittedly, though - this sounds a bit outside of my wheelhouse, and I'm no expert at bankruptcy law. It'd likely be worthwhile to have a lawyer review your agreement and the other party's bankruptcy filing. Then, they can advise on how best to move forward. For help finding the right New York lawyer, this resource should be valuable: Top New York Construction Lawyers.

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