McCarter obtained a ruling clarifying New York’s law on a bona fide encumbrancer for value in securing a dismissal from the Supreme Court of New York, Richmond County, of a claim made by a contractor mechanic’s lien holder seeking priority of an approximately $7 million lien over our lender client’s two mortgages on large warehouses totaling approximately $222 million. The lien had been dismissed on procedural grounds prior to our client issuing the mortgages, and although the liens were reinstated on appeal, the contractor did not move for a stay of the lien during the time that the mortgages were issued and did not file notice of the lien. Consequently, the court agreed with our argument that the lender was a bona fide encumbrancer for value and thus took priority given that it had no notice of the lien.
The McCarter team representing the lender was Adam Swanson, Stephanie Pisko, and Timothy Salter.