Contractor's License Question
Posted: Wed May 12, 2010 9:55 am
Listmates -- this question was sent to me by a colleague handling his first chapter 13 case. Any comments or suggestions I can pass along?
John Greifendorff
800-861-0786
jgreifendorff@greifenlaw.com
"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 Dunn-Edwards Paints.The Ch. 13 bankruptcy was filed and the suppliers were listed as unsecured creditors on Schedule F, including Dunn-Edwards Paints.
Dunn-Edwards has now filed a claim with the bonding company that issued our client his contractors license.
Dunn-Edwards 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."
The post was migrated from Yahoo.