Lien Law Update: Millions of Dollars of Mechanics Liens Filed on Major Projects

Every month NLB will gather the latest Lien Law Update and News and notify you in any change of the mechanics lien law in your state.

• VC Summer faces new lien totaling 0.7 million: The VC Summer nuclear plant in Fairfield County, South Carolina is subject to significant and increasing mechanic lien filings as lead contractor Westinghouse undergoes a Chapter 11 bankruptcy reorganization. This latest lien was filed by Aeon Industries, a subcontractor that provided materials used in the construction of the plant as well as labor. Mechanics liens are a common way subcontractors can preserve their right to payment when the lead contractor undergoes a bankruptcy.

• South Carolina, Georgia nuclear plants face 5.5 million in new liens:With the ongoing bankruptcy and reorganization of nuclear general contractor Westinghouse, mechanics liens are being filed on several nuclear projects in the South Carolina and Georgia area. Vigor Works LLC filed the mechanics liens on two projects for labor and materials provided. One of the projects, Project Vogtle, is expected to recommence and owners will be allowed to make some payments. Contractors are using mechanics liens to preserve their rights to receive payments on these projects.

• Contractor hikes lien on Norwalk theater to $2.4M:In Norwalk, Connecticut, the new Wall Street Theater is the source of claims between the Morganti Group and the theater owners. The contractor filed an initial.5 million mechanics lien, which it has since increased to.4 million. The theater claims that they have been improperly billed for incomplete work. The grand opening of the theater is set for May.

• Third Circuit Tells Construction Suppliers to "Play by the Rules" of Bankruptcy:A March 30th opinion from the Third Circuit held that two suppliers who were responsible for selling electrical materials to a bankrupt contractor subsequently violated bankruptcy's automatic stay by filing liens against the property. The court faced the question of whether a supplier can file a lien in New Jersey after a contractor has filed for bankruptcy protection. While the court found these liens did violate the stay, they made no mention of how this affects Section 362(b)(3) which allows an exception to the automatic stay for filing mechanics liens except to claim that no exceptions applied in this case. The New Jersey law in question focuses on preventing creditors from circumventing the bankruptcy process and collect money otherwise owed to the bankrupt party.

Staying on top of the nuanced changes in construction law, as well as the latest major projects, is part of what makes the team at National Lien & Bond effective. We study the latest cases and make sure we apply the latest findings to every client.