New opinion — bankruptcy blocks construction liens

In re: Linear Electric — bankruptcy — affirmance — Roth

The Third Circuit today held that a supplier may not file a construction lien under New Jersey law when the contractor has filed for bankruptcy, because doing so would violate the Bankruptcy Code’s automatic-stay provision. Construction liens allow a supplier to collect a debt owed to the contractor by a property owner in order to recoup what the contractor owes to the supplier.

Joining Roth were Shwartz and Cowen. The case was decided without oral argument.

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