Finally Extinct: Mammoth & Harrelson Decisions Disavowed by the Same Court That Issued Them

Back in the Summer of 2009, the entire North Carolina construction industry, particularly us construction lawyers, were shocked by a series of decisions handed down by the U.S. Bankruptcy Court for the Eastern District of North Carolina that essentially prevented subcontractors and suppliers from serving claims of liens upon funds up the contractual chain once an entity higher on that chain had filed for bankruptcy protection.  Nearly three years later, and in a surprise move that should come as welcome news to a wide swath of the contracting community (and particularly to subs and suppliers), the same court reversed course last Wednesday, and is once again permitting notices of claims of liens upon funds to be served despite the automatic stay provisions of federal bankruptcy law.

I’ll have more analysis in the days ahead.  In the interim, rest assured that the In re Mammoth Grading and the In re Harrelson Utilities decisions are for all intents and purposes no more.  To read the Order of Judge Randy Doub reversing course, click here.

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Filed under Federal case law, Lien Law

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