The post National Business Institute’s 2025 Outstanding Faculty Award appeared first on Amann Burnett Law.

As we enter the month of November, we invite you to remember your philanthropic duties and donate to non-profit organizations such as The Berkeley.

The post William Amann attends a fund-raising event at the Lanam Club, Andover, MA appeared first on Amann Burnett Law.

Wednesday, December 20, 2023. Register today at https://www.nbi-sems.com/ProductDetails/97707ER!

Use Promo Code FSPN50A at checkout to get $50 off! Hope to see you there!

Agenda / Content Covered

1. 2023 Bankruptcy Case Law Updates, Legal Trends, and Rule Changes

   10:00 – 11:00, Joshua Burnett

   1. Rule Changes and Form Amendments
   2. Student Loan Forgiveness in the Courts
   3. Bartenwerfer v. Buckley
   4. Subchapter V. Case Law
   5. Other Significant Cases and Trends
2. Cryptocurrency, NFTs, Other Digital Assets in Bankruptcy

   11:00 – 11:45, William J. Amann

3. Student Loan Debt and Bankruptcy

   12:00 – 1:00, Joshua Burnett

   1. Key Deadlines
   2. DOE and DOJ Updates and Guidance
   3. Implementation Strategies
4. Commercial Bankruptcy Updates

   1:00 – 1:45, William J. Amann

5. Consumer Bankruptcy in 2023

   2:15 – 3:00, Joshua Burnett

6. Updating Your Forms and Gearing Up for 2024

   3:00 – 3:45, William J. Amann

7. Ethical Standards

   4:00 – 5:00, William J. Amann, Joshua Burnett

   1. Competence
   2. Conflicts of Interest
   3. Client Communication and Consent
   4. Confidentiality and Disclosure Issues
   5. Preventing Fraudulent Transfers

The post Bankruptcy 2023 Review, Cryptocurrency, Student Loan Debt, Commercial Bankruptcy, Forms and More appeared first on Amann Burnett Law.

Some of the specific bankruptcy issues we handle regularly are Sub-Chapter V of chapter 11 (SBRA: Small Business Reorganization Act), business debt restructuring and winddowns, chapter 11 and 13 plan formulation, objections and confirmation, cash collateral motions and budgets and reconciliations, valuation and evidentiary hearings, proofs of claim and defense, dischargeability actions, preference actions, motions for relief and bankruptcy appeals.

As a firm focused on business, we are well versed in handling commercial lease disputes, entity formation, operating agreements, asset purchase and sale agreements, secured transactions under the uniform commercial code (UCC), shareholder and derivative actions, and partnership and small business litigation.

Business often intersects with real estate, whether it involves land use/variances, zoning, leases, development, sales or real estate-related litigation, and the lawyers at AMANN BURNETT have substantial experience with these issues as well.

We love working with businesses and people.  Above all, we are hardworking problem-solvers dedicated to obtaining the best results for you or your business.  We are personable and accessible.  Striking the right balance between work and life is important.   In my downtime, I sail, travel, cook, hike with my dog “Jack” and appreciate nature, music and art.  Attorney Burnett is an adjunct professor of law at the Massachusetts School of Law and is also an accomplished musician.

https://amburlaw.com/practice-areas/business-law

NHBR 8-11-23 wja and firm profile

The post In Case You Missed New Hampshire Business Review…. appeared first on Amann Burnett Law.

If you have any topics you would like to see us do, please send either of us an email or give us a call.  Over the years, we have presented on topics such as the following:

Business Acquisitions

Stock versus Asset Purchases

Advanced Business Contracts

Top Ten Evidence Mistakes to Avoid

FDCPA, CFPB and Bankruptcy

Real Estate Transactions

Bankruptcy Supreme Court Updates

Chapter 11 Bankruptcy Ultimate Guide

Advanced Commercial Real Estate

Appraisal Fraud and Negligence

The Automatic Stay

Subchapter /Small Business Bankruptcy Cases

Mechanic’s Liens in NH and MA

363 Sales

The post A little Thank You goes a long way appeared first on Amann Burnett Law.

I. Proof of Claim Objection Strategies

II. Bringing and Defending Preference Actions

III. Advanced Exemption Issues

IV. Mastering Lien Stripping and Avoidance in Chapters 7 and 13

V. Handling Student Loan Debt in Bankruptcy
A. Discharge and the Brunner Test
B. Creative Techniques for Debt Resolution

Go beyond the basics and get seasoned insights on how to handle some of the thorniest issues in consumer bankruptcy. Take away strategies for objecting to proofs of claim, bringing and defending preference actions, overcoming challenging exemption issues, and mastering lien stripping and avoidance.

• Get proven tactics for objecting to proofs of claims.
• Learn how to confidently handle Section 547 preference actions and defenses.
• Delve deep into advanced exemption issues.
• Gain techniques for removing liens in bankruptcy.
• Get practical tips for addressing student loan debt claims and defenses.

The post Amann and Burnett present Advanced Bankruptcy Seminar Summer 2023 appeared first on Amann Burnett Law.

               Crypto and Bankruptcy is, unfortunately, an emerging trend.  And we chat about third-party releases in cases such as the Boy Scouts of America and Pharma.

Register today at https://www.nbi-sems.com/ProductDetails/96710ER!  Use Promo Code FSPN50A at checkout to get $50 off! Hope to see you there.

1. MOAC MALL HOLDINGS, LLC vs. TRANSFORM HOLDCO, LLC, (22-1270,   Ct. April 19, 2023).

Reversing the Second Circuit, the Supreme Court handed down a unanimous opinion today in MOAC Mall Holdings LLC, deciding that Section 363(m) is not jurisdictional. It’s a limitation on the remedy available to an appellate court on an appeal from an order approving a sale.

Section 363(m) says that the reversal or modification “of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease [to a purchaser in good faith] . . . unless such authorization and such sale or lease were stayed pending appeal.”

The Second and Fifth Circuits have held that Section 363(m) is jurisdictional. The Third, Sixth, Seventh, Ninth, Tenth and Eleventh Circuits have held that it is not. The opinion for the Court by Justice Ketanji Brown Jackson was her first since her elevation in June 2022.

The Sale of a Sears Lease

The petitioner in the Supreme Court was the landlord of a Sears store in the giant Mall of America. The landlord objected to the assignment of a lease but lost in bankruptcy court.

Initially, the district court reversed the bankruptcy court, holding that a provision in a lease cannot supplant the requirement in Section 365(b)(3)(A) mandating that the financial condition of an assignee of a lease must be “similar to the financial condition . . . of the debtor . . . as of the time the debtor became the lessee under the lease . . . .” MOAC Mall Holdings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.), 613 B.R. 51 (S.D.N.Y. May 11, 2020). (“MOAC I”).

Two weeks later, the purchaser of the lease filed a motion for rehearing. Although having taken contrary positions throughout, the purchaser contended for the first time on rehearing that the appeal should be dismissed under Section 363(m) because the landlord had not obtained a stay pending appeal. Previously, the purchaser had consistently contended that the transaction was not a sale and that Section 363 did not apply.

Ruling on the motion for rehearing, the district judge said that the buyer now “seeks to benefit from a complete reversal of that representation.” MOAC II, 616 B.R. at 626. Citing In re WestPoint Stevens Inc., 600 F.3d 231, 248 (2d Cir. 2010), and In re Gucci, 105 F.3d 837, 838–840 (2d Cir. 1997), the district judge said that the Second Circuit had twice held that Section 363(m) is “a jurisdiction-depriving statute.” Id. at 624.

In MOAC II, the district judge granted rehearing, concluded that she lacked appellate jurisdiction, vacated her earlier opinion, and dismissed the appeal. The Second Circuit affirmed in a nonprecedential opinion. MOAC Mall Holdings LLC v. Transform Holdco LLC (In re Sears Holdings Corp.), 20-1846, 2021 BL 481940, 2021 US App Lexis 37358, 2021 WL 5986997 (2d Cir. Dec. 17, 2021).

The circuit panel said that the landlord’s argument “is foreclosed by our binding precedent in In re WestPoint Stevens Inc., under which § 363(m) deprived the District Court of appellate jurisdiction.” In another nonprecedential opinion citing WestPoint Stevens, a Second Circuit panel indeed had said that Section 363(m) is jurisdictional because it “creates a rule of statutory mootness.” Pursuit Holdings (NY) LLC v. Piazza (In re Pursuit Holdings (NY) LLC), 845 Fed. App’x 60, 62 (2d Cir. 2021).

The landlord filed a petition for certiorari in March 2022, raising the circuit split. The Court granted the petition at the end of the last term in June 2022.

Jurisdiction Must Be ‘Clearly Stated’

Addressing the merits, Justice Jackson rejected the buyer’s “creative arguments” and mirrored comments from the district court when she referred to the buyer’s conduct as “egregious” in waiting until rehearing in district court to raise the question of jurisdiction.

Justice Jackson’s opinion is another stab at repairing the Court’s precedents on jurisdiction versus power. She referred to “our past sometimes loose use of the word ‘jurisdiction.’” More recently, she said, “We have clarified that jurisdictional rules pertain to ‘the power of the court rather than to the rights or obligations of the parties.’”

Today, Justice Jackson said, “we only treat a provision as jurisdictional if Congress ‘clearly states’ as much,” citing Boechler, P.C. v. Commissioner, 142 S. Ct. 1493, 1494 (2022). On the other hand, Congress isn’t required to use “magic words,” she said.

To be jurisdictional, Justice Jackson said that “the statement must indeed be clear; it is insufficient that a jurisdictional reading is ‘plausible,’ or even ‘better,’ than nonjurisdictional alternatives,” again citing Boechler.

Applying precedent, Justice Jackson saw “nothing” in Section 363(m) “that purports to ‘gover[n] a court’s adjudicatory capacity,’” quoting Henderson v. Shinseki, 562 U.S. 428, 435 (2011). To the contrary, she said that “§ 363(m) takes as a given the exercise of judicial power over any authorization under § 363(b) or § 363(c).”

The section, Justice Jackson said, “consists of a caveated constraint on the effect of a reversal or modification” and “is not the stuff of which clear statements are made.”

Noting that Section 363(m) is not located in 28 U.S.C. § 1334(a)-(b), (e) and § 157, Justice Jackson said, “Statutory context leads to the same conclusion” that Section 363(m) is not jurisdictional. She said that the buyer “does not (because it cannot) deny the paucity of textual or contextual clues indicating a clear statement of jurisdictional intent.”

Justice Jackson said that Section 363(m) is “a mere restriction on the effects of a valid exercise of [appellate] power when a party successfully appeals a covered authorization.”

Commentary on Equitable Mootness?

The buyer argued in the Supreme Court that the appeal was moot even without regard to Section 363(m). Justice Jackson rejected the argument using words that might be read as undercutting the validity of the doctrine of equitable mootness, which is the topic of a pending petition for certiorari. See U.S. Bank N.A. v. Windstream Holdings Inc., 22-926 (Sup. Ct.).

Without relying on Section 363(m), the buyer argued that the appeal was moot because the transfer of the lease could not now be avoided as a post-petition transaction under Section 549 since the debtor alone had standing to raise Section 549 and the debtor had waived any rights under that section.

In short, the buyer was saying that the appeal was moot because no relief could be granted.

Justice Jackson said that a “‘case becomes moot only when it is impossible for a court to grant any effectual relief whatever to the prevailing party,’” quoting Chafin v. Chafin, 568 U.S. 165, 172 (2013). “The case remains live,” she said, “‘[a]s long as the parties have a concrete interest, however small, in the outcome of the litigation.’” Id.

In the MOAC appeal, Justice Jackson said, “[W]e cannot say that the parties have ‘no “concrete interest,’” id. at 176, in whether [the buyer] obtains that relief.”

As a court of “first review,” Justice Jackson rejected the mootness contention, saying, “[W]e decline to act as a court of ‘first view,’ plumbing the Code’s complex depths in ‘the first instance’ to assure ourselves that [the buyer] is correct about its contention that no relief remains legally available.”

The Court remanded the case to the Second Circuit for “further proceedings consistent with this opinion.”

American Bankruptcy Institute’s Observations

Today’s opinion casts doubt on the doctrine of equitable mootness, where courts routinely dismiss appeals from confirmation orders where the plans have been consummated. MOAC could be read to mean that appellate courts should not in the first instance decide that no relief is available following reversal.

MOAC could be read to mean that an appellate court should hear an appeal from a confirmed plan as long as there is constitutional or Article III jurisdiction. More often than not, the appellate court will uphold confirmation and never reach the question of whether there would have been available relief had there been a reversal.

On remand from reversal of confirmation, the bankruptcy court might locate a sliver of relief for the appellant that would not upset the apple cart and undo the plan altogether. Perhaps the bankruptcy court could award attorneys’ fees to the creditor who appealed confirmation and established an important principle about chapter 11 plans.

2.   Bartenwerfer  Buckley, 21-908 , (Supreme. Ct. Feb. 22, 2023)

Facts of the case

David and Kate Bartenwerfer renovated a house in San Francisco, California, and sold it to Kieran Buckley. After the sale, Buckley discovered defects in the house and sued the Bartenwerfers. A jury found for Buckley on several claims and awarded damages. The Bartenwerfers then filed for bankruptcy.

In the bankruptcy court, Buckley initiated an adversary proceeding against the Bartenwerfers arguing that the state-court judgment could not be discharged in bankruptcy because the debt was obtained through fraud. The bankruptcy court agreed, finding that the Bartenwerfers had intended to deceive Buckley, that Mr. Bartenwerfer had actual knowledge of the factual misrepresentations, and that Mr. Bartenwerfer’s fraudulent conduct could be imputed onto Mrs. Bartenwerfer because of their partnership relationship.

The Ninth Circuit Bankruptcy Appellate Panel (BAP) remanded the imputed liability finding with the instructions that the bankruptcy court determine whether Mrs. Bartenwerfer “knew or should have known” of Mr. Bartenwerfer’s fraud. On remand, the court held that Mrs. Bartenwerfer did not know of the fraud and thus was not liable for Mr. Bartenwerfer’s fraudulent conduct, and the BAP affirmed. Buckley appealed. The U.S. Court of Appeals for the Ninth Circuit reversed and remanded, concluding that the bankruptcy court applied the incorrect legal standard for imputed liability in a partnership relationship. The correct standard, based on binding Supreme Court and Ninth Circuit precedent, is whether the fraud was performed “on behalf of the partnership and in the ordinary course of business of the partnership.”

Question

Can a bankruptcy debtor be held liable for another person’s fraud, even when they were not aware of the fraud?

CONCLUSION

A debtor who is liable for her partner’s fraud cannot discharge that debt in bankruptcy, regardless of her own culpability. Justice Amy Coney Barrett authored the opinion for the unanimous Court holding that Mrs. Bartenwerfer could not discharge her partner’s debt even though she lacked knowledge of his fraud.

Section 523(a)(2)(A) provides an exception to discharge of “any debt…for money…to the extent obtained by…false pretenses, a false representation, or actual fraud.” The passive voice of that provision eliminates the significance of who engaged in the fraud, suggesting an “agnosticism” as to the identity of the wrongdoer. Neither the fact that neighboring provisions of the Code treat debtors differently nor the Court’s precedents support an alternative reading of that provision. Moreover, the Bankruptcy Code seeks to balance multiple interests, and the preclusion of faultless debtors from discharging liabilities run up by their associates is but one of those.

Justice Sonia Sotomayor authored a concurring opinion, in which Justice Ketanji Brown Jackson joined, to clarify that the Court’s opinion depends upon the agency relationship between Mrs. Bartenwerfer and her partner and that its decision does not consider the applicability of the provision when no such agency or partnership relationship exists.

3.   Financial Oversight and Management Board for Puerto Rico Centro de Periodismo Investigativo, Inc., 22-96 (Supreme. Ct. Oral Argument Heard Jan. 11, 2023, Decision Pending).

Facts of the case

The Centro de Periodismo Investigativo (“CPI”) is a nonprofit media organization based in Puerto Rico. It seeks disclosure of documents relating to Puerto Rico’s fiscal situation from the Financial Oversight and Management Board for Puerto Rico (“the Board”). The Board has declined to release the requested documents, and CPI asked the district court to compel production. The Board asked the district court to dismiss the litigation, arguing that it is immune from suit pursuant to both the Eleventh Amendment of the U.S. Constitution and the Puerto Rico Oversight, Management, and Economic Stability Act (“PROMESA”).

The district court disagreed with the Board, finding PROMESA abrogated any possible Eleventh Amendment immunity the Board might have enjoyed, and the U.S. Court of Appeals for the First Circuit affirmed.

Question

Does the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA)’s general grant of jurisdiction to the federal courts over claims against the Financial Oversight and Management Board for Puerto Rico and claims otherwise arising under PROMESA abrogate the Board’s sovereign immunity with respect to all federal and territorial claims?

4.   Lac du Flambeau Band of Lake Superior Chippewa Indians Coughlin, 22-227, (Supreme. Ct. Cert Granted Jan. 13, 2023, Pending).

Facts of the case

In July 2019, Brian W. Coughlin took out a $1,100 payday loan from Lendgreen, a wholly owned subsidiary of the Lac Du Flambeau Band of Lake Superior Chippewa Indians (“Band”). Later that year, he filed a Chapter 13 bankruptcy petition in the District of Massachusetts and listed his debt to Lendgreen as a nonpriority unsecured claim. When he filed his petition, the Bankruptcy Code imposed an automatic stay enjoining “debt-collection efforts outside the umbrella of the bankruptcy case.”

Despite the stay, Lendgreen repeatedly contacted Coughlin seeking repayment of his debt. Coughlin moved to enforce the automatic stay against Lendgreen, and in response, the Band asserted tribal sovereign immunity and moved to dismiss the enforcement proceeding. The bankruptcy court granted the motion to dismiss, and the U.S. Court of Appeals for the First Circuit reversed.

Question

Does the Bankruptcy Code unequivocally abrogate tribal sovereign immunity?

The post Bankruptcy Update 2023, Crypto Currency and Third-Party Releases appeared first on Amann Burnett Law.

Please visit Attorney Karalynn Cromeens’ podcast where she interview Attorney Amann about mechanic’s liens in New Hampshire.  Attorney Cromeens is the Managing Partner at the Cromeens Law Firm, PLLC in Houston, Texas.

www.TheCromeensLawFirm.com

1. Do you have to be a licensed contractor to work in NH?

New Hampshire is among only a handful of states that does not require a license for construction or renovation projects at the state level. This means that if you plan on becoming a general contractor in New Hampshire, you will need to check with your local city or county jurisdictions to meet their requirements.

Licensing by the state government is, however, required for several specialty classifications. Electricians, plumbers and asbestos and lead abatement practitioners must obtain licensure at the state level. To obtain licensing for these specialties, you will need to go through the proper licensing process, including applying to the appropriate board, exams and education, and paying all necessary administrative fees.

Licensing, however, often cannot be completed until you become bonded and insured, if you will be hiring employees that is. Having bond insurance informs clients that what they paid for will be completed, or that their money will be reimbursed. Check your local municipality to find bonding costs and requirements. Manchester, NH, for instance, requires a surety bond of $5,000 and a payment bond of $10,000, in addition to general liability insurance and workers compensation.

2.  Who has lien rights?

A mechanic’s lien may be filed by any person who, alone or with others, performs labor or furnishes materials worth $15 or more to any construction project. N.H. Rev. Stat. Ann. § 447:2. In other words, general contractors, construction managers, design-build teams and others may be entitled to a mechanic’s lien. Exactly who among the persons who contribute to the construction project is entitled to assert a lien varies.  Whether certain contributions, such as an architect’s blueprints, the rental company’s lease of a backhoe to a contractor, or the local business’s provision of portable toilets to the job site, may be entitled to a mechanic’s lien depends on the circumstances.

The general rule is that anyone who supplies labor or materials directly under contract with the owner is entitled to a lien.  This includes the general contractor, construction managers, design professionals, equipment suppliers and others who have contracts directly with the owner.

A subcontractor must have a contract directly with either the general contractor or a subcontractor of the general contractor.  New Hampshire Rev. Stat. Ann. § 447:5 grants anyone furnishing labor or materials “by virtue of a contract with an agent, contractor or subcontractor of the owner” the same lien as that provided to general contractors.  In other words, mechanic’s lien rights can extend to those who have contracts directly with the first-tier subcontractor. See Lyle Signs, Inc. v. Evroks Corp., 132 N.H. 156, 159 (1989).

(a) Site of Subcontractor’s Performance

Subcontractors need not actually perform work at the site. A subcontractor who designs and fabricates entirely in its own shop items that will be incorporated into the project is still considered a subcontractor. Lyle Signs, Inc. v. Evroks Corp., 132 N.H. at 161.

(b) Bonding in Lieu of Mechanic’s Lien

A subcontractor may choose to accept a note or a bond in lieu of a mechanic’s lien. N.H. Rev. Stat. Ann. § 447:14; Calef v. Brinley, 58 N.H. 90 (1877) (whether a lien is waived by the taking of a note depends upon the understanding of the parties at the time). In addition, a subcontractor may, by contract, waive its right to assert a mechanic’s lien in the first place. Duke/Fluor Daniel v. Hawkeye Funding, LP, 150 N.H. 581 (2004).

New Hampshire Rev. Stat. Ann. § 447:3-5 provides lien rights to persons who “perform labor or furnish materials” to a building project. Companies who lease equipment to contractors or subcontractors to accomplish the task at hand are some of the most important contributors to the work site.  Typically, however, equipment suppliers are neither furnishing labor nor supplying materials to the construction project.

New Hampshire Rev. Stat. Ann. § 447:16 requires contractors on public projects to supply a bond to ensure payment to subcontractors and suppliers.  IN NH, mechanic’s liens cannot be recorded against public property. Rather a bond is required on all public projects. The bond requirement has long been interpreted to constitute substitute security for contractors, subcontractors and suppliers whose mechanic’s lien rights are seriously limited on a public project. New Hampshire Rev. Stat. Ann. § 447:16 requires that the bond must ensure payment for “equipment hired” and “fuel used” in prosecuting the work.

In 2012, the New Hampshire legislature amended N.H. Rev. Stat. Ann. c. 447 to include design professionals as those entitled to mechanic’s liens. “Design professionals” are defined under N.H. Rev. Stat. Ann. § 447:2, II as architects, engineers, septic designers, wetland and soil scientists and land surveyors.  Design professionals are subject to the same statutory requirements as all other suppliers of labor and materials to a project. Accordingly, the design professional must have a contract directly with either the general contractor or a subcontractor of the general contractor.

A lien is automatically created by furnishing labor or materials to real property.  The party seeking payment must also perfect its lien in order to enforce the mechanic’s lien.  See Pine Gravel, Inc. v. Cianchette d/b/a Site Prep, 128 N.H. 460, 464 (1986).  A mechanic’s lien may be perfected only by filing a lawsuit through a writ of summons and a petition for ex parte attachment on a mechanic’s lien.

GENERAL CONTRACOTRS-New Hampshire’s mechanic’s lien statute makes a distinction between those claimants who have a direct contract with the owner and lower-tiered contractors (whose only contract is with the general contractor or a subcontractor).  This distinction gives general contractors more expansive lien rights than subcontractors, suppliers, or other down-chain contracting parties.  A contractor or a materialman is entitled to an “automatic” mechanic’s lien only if it has a direct agreement with the owner for the provision of labor and materials. General contractors are often the only parties meeting this criterion. Assuming compliance with the statutory requirements, a general contractor has a lien from the first day of work without taking any extra steps other than eventually perfecting the lien should it need to be enforced.

SUBS–New Hampshire Rev. Stat. Ann. c. 447 requires different notice and accounting procedures for subcontractors.  Subcontractors are required to provide the property owner with written notice of their intent to claim a mechanic’s lien. This notice must be provided prior to starting the work. N.H. Rev. Stat. Ann. § 447:5. If notice is not given until after work starts, the subcontractor’s lien is limited to the amounts then due to the general contractor or that may become due after notice is given. N.H. Rev. Stat. Ann. § 447:6; Russell d/b/a Maine Mechanical v. Woodbury, 135 N.H. 432, 435 (1992). Consequently, if the subcontractor’s contracting party (i.e., the general contractor) has been paid in full by the time of the subcontractor’s notice of intent to claim a lien, the lien does not attach because nothing is due from the owner. The mechanic’s lien attaches to the owner’s property only to the extent that any future amounts may become due at that point. Accordingly, the sooner the subcontractor provides notice of its lien rights, the more likely it is to secure the full value of its lien. The form of the notice need not be complex and may simply state that the subcontractor will be furnishing labor or materials to the owner’s property pursuant to a contract with the general contractor and that the subcontractor intends to claim its mechanic’s lien rights under N.H. Rev. Stat. Ann. c. 447.

N.H. Rev. Stat. Ann. § 447:8 also requires subcontractors to provide a written account of the labor and materials furnished.  This requires the owner to retain a sufficient sum to satisfy that amount unless the party seeking the lien has been paid by the contractor or the subcontractor.  The accounting may be given when the initial notice of lien is given, and it must be updated and provided to the owner every thirty days. N.H. Rev. Stat. Ann. §§ 447:6, 8. The accounting should describe the labor and materials furnished and state the current and total balance due. If no work has been performed during the previous thirty days and providing notice would be “an empty formality,” failure to provide the accounting may be excused.  McGranahan v. Standard Constr. Co., 101 N.H. 46, 47 (1957). The property owner may also waive the accounting as well as the written notice requirement. Janvrin v. Powers, 79 N.H. 44 (1918).

The deadline for securing a mechanic’s lien is 120 days after the services are performed or the material is supplied. N.H. Rev. Stat. Ann. § 447:9.  The timing requirement for filing a mechanic’s lien is not tied to substantial completion of the entire project but to the last day that the subcontractor performed work on, or supplied materials to, the project. N.H. Rev. Stat. Ann. § 447:9.

The mechanic’s lien is lost if not filed within the statutory period. Tolles-Bickford Lumber Co. v. Tilton School, 98 N.H. 55 (1953). The performance of punch-list repairs or work performed on the site under a separate contract will generally not extend the 120-day tolling period.  The statutory period for perfecting a lien is neither shortened nor extended by insolvency, receivership, death, or breach of contract. Tolles-Bickford Lumber Co. v. Tilton School, 98 N.H. 55 (1953); Russell v. Howell, 74 N.H. 551 (1908) (death of owner does not terminate lien); Freeto v. Houghton, 58 N.H. 100 (1877) (running of lien period is not suspended by owner’s breach of contract that caused the contractor to abandon the work).

The applicable rule is that work of an “inconsequential nature” or work done to remedy defects will not extend the 120-day deadline. Bader Co. v. Concord Elec. Co., 109 N.H. 487, 488-89 (1969) (deadline not extended where subcontractor returned at request of owner to correct defects).  In Peabody v. Weitzell, 123 N.H. 416 (1983), the court held that the 120-day deadline was not extended where the contractor returned to the site to perform work that was not included in the original contract. Similarly, in Tolles-Bickford Lumber Co. v. Tilton School, 98 N.H. 55 (1953), the court held that, although the supplier later provided additional material to correct a shortfall, the statutory period commenced to run from the date a final bill was rendered to the owner. On projects that extend over long periods of time, which may involve several distinct phases of construction, the contractor might be well-advised to raise this issue with the owner.

3.  Are attorney’s fees and costs recoverable on ML’s?

When a plaintiff sues for money damages, he often seeks a lien or “attachment” on the defendant’s real property as security for a judgment.  In New Hampshire, RSA 511-A:4 authorizes attachments “to the extent reasonably necessary to secure any judgment or decree which the plaintiff is likely to obtain” including “allowable interest and costs.”  Such attachments are typically granted in an amount that will also cover any contractual right to interest and attorneys’ fees.  And while Mechanic’s liens, under RSA 447, are attachments too, RSA 447 does not provide for the inclusion of attorney’s fees and costs.     In the absence of express statutory language, it seems that the underlying “value added” theory behind mechanic’s lien statutes does not include for the liening of anything that is not strictly “labor or material”.  When real estate is improved by labor and materials, it is presumed to increase in value, as measured by the price of the labor and materials.  It is fair to give the providers of labor and materials a lien to that extent because the owner is no worse off when his property is liened for the price of those unpaid goods and services.  The lien accomplishes a transfer of value from benefited owner to unpaid contractor or supplier in recognition of the value they added to the property.  Attorneys’ fees and interest add no value to the property.  I think this is a bad and unfair principle.   Perhaps a separate attachment under RSA 511 for legal fees and costs can be brought in addition to a Mechanic’s Lien under RSA 447.

The post Overview of Mechanic’s Liens in New Hampshire appeared first on Amann Burnett Law.

Register today at https://www.nbi-sems.com/ProductDetails/96564ER!

Use Promo Code FSPN50A at checkout to get $50 off! Hope to see you there!

The post Legal and Tax Aspects of LLC Formation Seminar appeared first on Amann Burnett Law.

What is a 363 Bankruptcy Sale?  We’ll explain that for novices and get into the nooks and crannies of structured, Chapter 11 dismissals and sub rosa Plans for the more experienced practioners too.  Whether you are selling, buying or investing in potential commercial sales out of Bankruptcy, this seminar will give you key, due diligence pointers and a solid overview.

The post Navigating 11 USC 363 Sales in Bankruptcy appeared first on Amann Burnett Law.