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We have a contractor that recently filed for Chapter 11 Bankruptcy protection. Can we still file a lien in Maryland?

Maryland

We recently received notice from one of our National accounts that they filed for Chapter 11 Bankruptcy protection. We have two jobs in progress with this account, We last furnished lighting materials to this account on 12/21/22. We haven't shipped anything since receiving the bankruptcy notice. My question is simple. Can we pursue mechanic liens on these two unpaid / unfinished projects; one owing $26,500 and the other $6,500 ; total owed to us is $33,000 after receiving the Notice of Chapter 11 Bankruptcy Case (Official Form 309F) dated 1/17/2023?

4 replies

Feb 2, 2023

This is actually a tricky situation. Under Maryland law there is nothing preventing the filing of a mechanic's lien, assuming the elements under the statute are met. However, under federal bankruptcy law, it is possible that the automatic stay will be construed to include any matter in which the bankrupt filer maintains an interest, which would prevent a state court from proceeding on a mechanic's lien action such as this. 

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Feb 2, 2023

Thank you for responding. Levelset doesn't facilitate lien filings in the State of Maryland. Are pursuing these two liens, irrespective of the circumstances, something your firm would be willing to handle for my company. I have been instructed by my managers to file liens on these two projects if it's legal. I'm fairly certain we haven't jeorpardized our lien rights in any way. Is there a way we can discuss this outside of this forum so I can get details on whether it's worth our while to file these liens? 

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Feb 2, 2023

You can certainly contact me directly via email: joe@joekatzlaw.com. You may learn more about my firm at www.joekatzlaw.com.

Looking forward to speaking with you.

Joe

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Feb 2, 2023

The question is simple but the answer is not, it depends on residential or commercial, where in the chain the customer is related to the GC, etc. If you would like to make an appointment for a consultation, we charge $200 for a first consultation; if it's more than 1 hour, no extra charge. Please bring send documentation, such as emails or correspondence concerning, any contract or lease, and any other written material or photos that bear on the case.  We can do this remotely or in person. Please let me know if you would like to schedule an appointment.
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