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NEEDING TO GET PAYMENT FROM A COMPANY THAT HAS BEEN SOLD

TexasRecovery Options

Our company installs Structured Data cabling in banks and schools. In 2016 there was a project that was started and 2 1/2 years later the project was finished. The cabling was contracted to us by a company that was in business at that time, but when the project was completed the company we contracted through had been sold to a major company that is now saying they bought the business but not the debts they have outstanding. The company we contracted thru still has an accountant and a law firm I am assuming because of the situations we are faced with. Part of the project was bid with an E-Rate bond to the school in which we provided $20,000.00 in materials and labors and an additional $4500.00 that was not E-Rate. The company we contracted with failed to keep the government forms up to date so the E-Rate bond was cancelled and according to the company they have been trying to get it fixed so everyone can be paid. The school under that bond was only obligated to pay 15% of the final invoice and until ETCS can get the E-Rate fixed and approved they will not pay the 15% of the invoice. The school is a good customer but we need the $20000.00 so I am asking for advise. How do I put a lien on a company that doesn't exist? Should I send a certified letter to the school and ETCS stating that by a determined date, if we aren't paid we intend to repossess our equipment and cabling other than the amount that has been payed?

1 reply

Jan 30, 2019
I'm very sorry to hear about that. First, I should mention that I'm not able to give you any advice about the above situation - but I can provide some information that might help you to navigate the situation on your own. Of course, note that you can always consult with a local attorney who will be able to review the detailed circumstances of your situation and provide advice on how best to proceed. With the considerable number of moving parts present in the above scenario, an attorney reviewing the situation would likely be very beneficial. With that in mind, let's look to some specifics. First, regarding a potential lien claim, mechanics liens don't attach to specific companies - rather, they attach to the underlying project property. What's more, when the project property is publicly owned, very typically, that property won't be subject to mechanics liens. Rather, an unpaid claimant's remedy would be to file a claim on the project's payment bond (if one is present) or to file a lien claim on public funds (which will attach to the project funds rather than the the property). However, the availability of a claim of lien on public funds may be questionable - a claim of lien on public funds will only be present in the event that the project did not exceed $50,000, plus, it will only attach to funds designated for that project but not yet paid. As far as the presence of a bond upon which a claim might be made, a payment bond must be present if: (1) the project was contracted by a public entity other than a municipality or a joint board, and it exceeds $25,000; or (2) the project was contracted by a municipality or joint board and it exceeds $50,000. That's important because, if a bond was secured, a claimant will be able to make a claim against the filed bond - and that guarantees that there's money on the other end of the dispute if the claim is properly made. Plus, if a bond was supposed to be present but wasn't required by the public entity, a claimant can go directly after the public entity for the funds. In any event - while bond claims or claims of a lien on funds may or may not be available or effective options, sending a demand letter threatening either legal action or to remove the installed materials could be an effective route. Sending such a letter to the original contractor, the company who purchased that contractor, and to the public entity in charge of the project could potentially help to compel payment. After all, the more parties aware of the potential claims, the more potential parties who might be willing to make payment. Further, while the company who purchased the company contracted through might claim they have no obligation to pay the debts of the company they purchased, that doesn't necessarily mean its true - and bringing in a local business attorney to help draft a demand letter could help to clarify that situation.
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