So liens can be placed on the ownership properties by sub-contractors if the main contractor was supposed to pay them because technically it’s the property owner to ensure everyone is paid.
Project 2022: Pantheon
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So liens can be placed on the ownership properties by sub-contractors if the main contractor was supposed to pay them because technically it’s the property owner to ensure everyone is paid.
It’s still a big amount of assumption going on with that though. But the reason I’m asking what I am is to clear that part up. March 11th could simply be the last date any contractor was there or the date the last payment was made.
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For me, this is a big concern. Henderson has a lengthy relationship with BGW and I think it would be very costly for both parties if that relationship gets severed.
March 11th is the court filing date, so you'd need to work backwards to determine when SEAS told Henderson they weren't paying them monies due. I'd assume that Henderson would spend a few days on calls with SEAS executives and then having internal legal discussions on strategy before filing a complaint in court.
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Part of me is hoping that WESH or another major local news source sees the article and picks this story up.
All due respect to Zachary, but the TV news outlets have a few more tools at their disposal. Like if @Zachary went to Henderson for comment on this article they'd probably just tell him to GTFO. But if WESH showed up on their doorstep with cameras...
All due respect to Zachary, but the TV news outlets have a few more tools at their disposal. Like if @Zachary went to Henderson for comment on this article they'd probably just tell him to GTFO. But if WESH showed up on their doorstep with cameras...
I do agree with the second sentence wholeheartedly and it’s why I’m curious. It would seem this is a dramatic step that has the potential to really hurt one or both is this goes poorly.
So based on everything I’m reading liens in VA are based on stoppage of work. So if Henderson is filing that would me their work stopped some time between Dec 12 2019 and Mar 11 2020.
What seems to be interesting is that a lien can be filed before any payments need to be made. And liens must be paid within 6 months.
This site is a good read:
Fullertonlaw.com/mechanics-lien-in-virginia#_Toc10938000
Basically my takeaway is there is a possibility that the work stopped in this and SWO’s cases, and the contractors filed a lien to ensure they got paid rather than to claim on non-payments.
Actually I found a site kinda backing what I’m thinking here:
Levelset.com/blog/filing-mechanics-lien-Coronavirus-impact/
I doubt you can even make a claim until non-payment occurs as there's no contract violation at that point. The only way would be if SEAS sent notice that they were not going to pay their invoices ahead of time which Henderson then used to file their court complaint and get a lien. In the SWO article SEAS stated flat out they weren't paying their vendors, which almost certainly violated contract covenants they had with those vendors.
A challenging issue related to this I see is that Henderson and other SEAS vendors are going to want modified or new contracts before continuing work for SEAS such as up-front payments or escrow accounts to cover work in progress. That could cause further delays or force SEAS to look for other vendors to complete outstanding work. Doing what SEAS did burns business relationships and hardly anyone wants to do business with someone that has a reputation for stiffing them on payments and forcing them to go to court to get paid.
FWIW, I was curious about the liens, and I kinda pokes around the Orange County Comptrollers website this morning. Seems as though Universal has some liens that popped up around the time the pandemic got serious. Ditto for Disney Vacation Development (AKA DVC).
And just to be clear - I'm not saying that SEAS/BGW is in the clear here. Rather it seems as I poke around in places you can easily find it (I found hints at one for BGT too but no hard confirmation) that the filing of mechanics liens were up a good bit at the start of the pandemic and the advice from law offices were to file one to ensure your company ends up getting paid.
And just to be clear - I'm not saying that SEAS/BGW is in the clear here. Rather it seems as I poke around in places you can easily find it (I found hints at one for BGT too but no hard confirmation) that the filing of mechanics liens were up a good bit at the start of the pandemic and the advice from law offices were to file one to ensure your company ends up getting paid.
Incorrect based on my reading. You can file one any time you start work. Don't have to have a missed payment.
Like I said, based on reading various sites, it seems as though advice to contractors was to file, and SEAS/SWO statement of not paying their vendors could be something agreed upon post lien filing. A lien can be a tool for contractors to ensure they get paid or restart work. The "trouble date" for BGW/SWO/SEAS is going to be early September - 6 months after filing. If payments haven't been made or work restarted at that point, then there's legal repercussions.
Yes you can technically file a lien, though there's no enforcement unless non-payment is actually occurring. For a business relationship going back years and probably operating under broad detailed contracts, filing a lien would be a last resort mechanism. Filing liens under that kind of business relationship is really unnecessary and pretty offensive to the purchasing company, particularly if they've been paying on time for years.
My assumption is late February / early March SEAS told all their vendors they weren't going to be paid until the parks re-opened. The vendors then went and put liens against the work done to protect themselves. All these contract issues will need to be worked out before I see work re-commencing at any of the SEAS parks as most vendors like to be paid for work done.
I disagree with the part of “its offensive”. It’s a legal tool a contractor has at their disposal to ensure payment.
Also you keep referencing that it was in response to non-payment which (1) theres no proof that there was a lack of payment and (2) contractors can file a lien in VA at any time regardless of if payments even need to be made yet as long as materials ordered by the contractor has arrived or work commenced.
I mean, there could have been an agreement that due to the short period of time to file anything with the courts that using a mechanics lien was the easiest to do in leu OG working out an actual contract.
Given all we have is a record of a lien being filed, we shouldn’t really assume anything about the lien.
Also you keep referencing that it was in response to non-payment which (1) theres no proof that there was a lack of payment and (2) contractors can file a lien in VA at any time regardless of if payments even need to be made yet as long as materials ordered by the contractor has arrived or work commenced.
I mean, there could have been an agreement that due to the short period of time to file anything with the courts that using a mechanics lien was the easiest to do in leu OG working out an actual contract.
Given all we have is a record of a lien being filed, we shouldn’t really assume anything about the lien.
Somewhat. A good comparison there would be that you can’t pay the full amount, so they agree to a payment plan, but then file the lien to ensure they get payment and take it off when you finish paying.
you also have to realize payment schedules for AIA contracts. Typically you get paid 30-45 days past the invoice date. Example in this case would be January's billings get submitted by the acting GC on the 30th of the respective month to the client (SWO), client has 30 days to pay GC, then GC pays subs. So in all case Henderson had not been paid for January's billings yet by first week of March.
I don't think the Orlando news story occurs if the vendors were agreeable to the payment plans. I believe SEAS is making a calculated assumption that they can force vendors to take delayed payments based on the cost of going to court and trying to foreclose on property that probably has little value outside their parks. The liens are filed to ensure the vendors can foreclose on property in the case that SEAS goes bankrupt.
I am not an expert on liens, but my understanding was that they are not all that uncommon.
Especially in a case like this where the contractor has to assume that SeaWorld might go bankrupt before they pay it would be a way to ensure that they will receive some of their money in the proceedings.
Theoretically its even possible that they left on good terms and just filed the lien for legal reasons because otherwise they wouldn't be able to file it later if things go bad for SeaWorld.
Especially in a case like this where the contractor has to assume that SeaWorld might go bankrupt before they pay it would be a way to ensure that they will receive some of their money in the proceedings.
Theoretically its even possible that they left on good terms and just filed the lien for legal reasons because otherwise they wouldn't be able to file it later if things go bad for SeaWorld.
That's the point I've been making. It's very possible both sides are still on good terms and contractors are just covering themselves. A majority of the legal advice as things were getting serious were to file even if the customer was in good standing.
I have to disagree. If seas were forced to sell bge the lean insures that payment happens before the sell is finalized. It doesn’t really hurt bge in any way... the mechanics lien doesn’t force bge to pay, and automatically expires in six months...
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