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Contractor Question
Yes, bonding company needs to be listed as a creditor. they have indemnity
rights.
David A. Tilem
Certified Bankruptcy Specialist*
Law Offices of David A. Tilem (a debt relief agency)
206 N. Jackson Street, #201, Glendale, CA 91206
Tel: 818-507-6000 Fax: 818-507-6800
* Bankruptcy specialist cert. by State Bar of CA Bd of Legal
Specialization.
Hale Andrew Antico
Sent: Thursday, May 06, 2010 12:15 PM
To: cdcbaa@yahoogroups.com
Subject: RE: [cdcbaa] Contractor Question
A surety bond is not property of the estate in meaning of 11 USC 541. Matter
of Lockard, 884 F2d 1171, 1178 (9th Cir, 1989). Thus, no violation of the
automatic stay under 362. Hale
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The post was migrated from Yahoo.
List mates -- this was sent over by a friend of mine this morning. I'd
appreciate any comments or observations.
_____
Our client is a cabinet maker that holds a Contractors License. When money
was tight he finished the jobs but did not pay the suppliers in full at the
completion of the jobs. One of those suppliers was X .
The Ch. 13 bankruptcy was filed and the suppliers were listed as unsecured
creditors on Schedule F, including X
X has now filed a claim with the bonding company that issued our client his
contractors license.
X was well aware that the client had filed bankruptcy because they filed a
claim.
The Ch. 13 Plan was confirmed last month. The unsecured creditors will be
paid 17%. Can they go after the bonding company for the monies due since
they are already being paid through the Ch. 13 Plan?
The letter addressed to our client from American Contractors Indemnity
Company states,
"Please know that the bankruptcy does not exonerate the bond and we must
investigate the claim in order to determine whether a violation of the
Contractors License Law has occurred."
It also states,
"...it is our understanding that you have received payment in full on the
projects, it appears that you would have received sufficient funds with
which to pay the claimant the monies due. As such, it appears that a
violation of Section 7120 of the Contractors License Law has occurred. This
section states as follows:
Willful or deliberate failure by any licensee of agent or officer thereof to
pay any moneys, when due for any materials or services rendered in
connection with his operations as a contractor, when he has the capacity to
pay or when he has received sufficient funds therefore as payment for the
particular construction work, project, or operation for which the services
or materials were rendered or purchased constitutes a cause for disciplinary
action..."
The bonding company was not listed as a creditor. Would it be helpful to
have had them listed as a creditor, If so, is it too late.
_____
John Greifendorff
Attorney at Law
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The post was migrated from Yahoo.