Mechanic's Liens & Bond Rights in Bankruptcy Preference Cases

Can a paid construction supplier or subcontractor be worse off under the Bankruptcy Code than if unpaid? If a construction material supplier could enforce mechanic's lien or bond rights to successfully obtain payment after a bankruptcy petition, could receipt of the same payment prepetition be an avoidable preference? The United States District Court for the Eastern District of North Carolina is faced with these questions in at least two cases at this moment.Click here to track the progress of this case, see the court orders entered and the legal briefs and arguments filed by all parties in the Angell v. United Rentals case.