Construction contracts present unique problems in bankruptcy. This is because these contracts involve the rights and obligations of at least three separate categories of persons: owners, general contractors, and subcontractors.
A bankruptcy filed by a general contractor jeopardizes a subcontractor’s right to payment. When this happens, the subcontractor should be ready to act. This Contracts Bulletin provides insight into bankruptcy and presents the steps that a subcontractor might take to protect its interests.
Topics covered in this bulletin include:
- Bankruptcy Overview
- Chapter 7 Liquidation
- Chapter 11 Reorganization
- Commencement of Bankruptcy
- Having to Give Money Back to the Debtor
- Subcontractor Remedies
- Mechanic’s and Materialmen’s Lien
- Other Approaches to Receive Payment
- Trust Funds’ Statutes
- Express Trusts
- Constructive Trusts
- Use of Joint Payee Checks
- Restitution Claim
Contracts Bulletin No 5 - Part 2 was prepared by SMACNA’s general counsel. All members are encouraged to read this latest update.