At Levy | von Beck | Comstock | P.S., we have a proven track record of collecting debts – whether large, small, secured, or unsecured – for our many creditor clients dating back to 1984. Over the past 15 years alone, we have recovered on average over $8 million each year just in principal. Here are the totals for those 15 years:
Principal Recovered and Returned To Clients: $124,533,875.96
Late Charges Recovered and Returned To Clients: $463,210.11
Attorney’s Fees Recovered and Returned To Clients: $234,389.88
New clients are often surprised to learn that we pursue late charges and attorney’s fees just as aggressively as recovery of principal. We believe that, to the extent it is contractually allowed or permitted by statute, the debtor should be responsible for fees, costs, and late charges. These additional recoveries can also help to greatly offset collection costs, a primary concern for most credit managers and controllers.
The examples shown below demonstrate that our relentless collection team uses many different tools and strategies in pursuit of a swift and favorable recovery. We’re not going to give away all our secrets, of course, but these cases show you that even large hurdles will not slow down our collection team from getting clients paid. It is also worth noting that we try to actively consult with clients about leveraging tools that help secure receivables, most of which help reduce DSO and write-offs, adding to their bottom line profits.
Some of those strategies include:
- Leveraging mechanic’s lien and bond claim rights
- Perfection of security interests in a debtor’s assets
- Obtaining a deed of trust as collateral on existing obligations
- Obtaining a third-party corporate guaranty
- Security interests in vehicles
- Client: A fabricator and distributor of glass for large commercial applications
- Debtor: A customer who was also the general contractor
- Project: A federal building remodeling in North Carolina
- Our client fabricated glass that was delivered to their customer’s warehouse in Woodinville, Washington. The customer, a glazier, contracted with a federal agency to produce metal window frames containing our client’s glass, after which the glazier planned to ship the finished product to the job site in North Carolina and install it using a local subcontractor.
- The client became alarmed when it realized that no product had been shipped to the glazier for over 100 days and that some invoices were more than 120 days past due.
- Also, the client informed us that at least 80% of the glass constituting the past-due balance was still located in the customer’s Woodinville warehouse, which was almost 3,000 miles from the job site.
- Upon investigation we discovered that the customer was in default with the federal agency because of production delays and that termination from the project was imminent.
- We also confirmed that the customer was performing as the general contractor and the bond principal, which meant that the 90-day Miller Act filing requirement was waived for our client.
- Our firm submitted a bond claim and began corresponding directly with the Surety in an effort to recover payment short of litigation. The surety argued that it was not liable because the product was not incorporated into the improvement and, therefore, it refused payment.
- A review of the Fourth Circuit cases confirmed our belief that because the client had a good faith belief that its materials were intended for use on the project, it would have the protection of the bond regardless of whether the materials were incorporated.
- Our firm then associated with local counsel in North Carolina and foreclosed the Miller Act claim in Federal Court.
- After several rounds of discovery, the surety acquiesced and offered a settlement figure equal to 95% of principal, which the client gladly accepted. During this process, the customer filed for bankruptcy protection. So, if we had not successfully asserted that bond claim, our client would have lost several hundred thousand dollars.
- Client: A material supplier
- Debtor: Subcontractor
- Project: Commercial project for an airline located at SeaTac International Airport
- The client’s customer was a subcontractor working on the upgrade of an airline’s service center area at SeaTac Airport. The customer’s invoices were significantly past due when the client referred this account to our firm, and the customer had previously defaulted on several promises to issue payment.
- The client knew that a payment bond wasn’t used on the project and assumed it did not have any lien rights.
- Rebecca Bowers, a longstanding member of our team, discovered that our firm had processed a private works Notice to Owner (preliminary notice) and that the client could in fact file a mechanic’s lien on the leasehold improvements.
- The general contractor was familiar with our firm and Rebecca leveraged that contact prior to recording a lien by transmitting copies of the open invoices and pick tickets.
- Even though the general contractor was holding enough contract funds belonging to the customer, he wasn’t willing to issue a direct payment to our client. We then drafted a mechanic’s lien and emailed a copy to the general contractor to make it clear our firm was on the verge of filing a lien on his project.
- At that juncture, the general contractor offered a joint check listing our client as a dual payee in exchange for a conditional final waiver. We agreed, transmitted the waiver, and received full payment of the client’s receivable without having to record a claim of lien.
- Client: Material Supplier
- Debtor: Subcontractor
- Project: Mixed Use Retail and Commercial Apartments
- Our client furnished electrical products to be installed in a mixed-use project in Sacramento, California.
- At the inception of work, the client asked our firm to process and mail a California preliminary notice, which we also provided to the property owner, the tenant, and the construction lender.
- At the completion of the customer’s work, the general contractor provided our client with an ambiguous lien waiver that the client interpreted as a conditional final waiver when in fact it was intended as an unconditional final waiver. The client signed the document and waited for a payment that never arrived.
- After the matter was referred, our team reviewed the waiver and discovered that the general contractor failed to use the statutory California waiver form.
- We also learned that the general contractor had paid our client’s customer in full and that the customer probably didn’t have the financial resources to pay the balance in less than two years.
- We provided the general contractor with a copy of the statutory waiver form, cited the statute, and demanded full payment. The general contractor realized that payment to our client would create a significant shortfall, thereby minimizing his anticipated profits, and so it refused to issue payment.
- Our team drafted and recorded a California Mechanic’s lien using the recently revised statutory format, and sent notification to the required parties.
- The general contractor deferred to his legal counsel who, while he agreed with our conclusion, offered only a portion of the lien amount. After conferring with our client, we referred the lien to our associate counsel in California to commence foreclosure.
- Prior to filing we directed counsel to send a draft of the foreclosure to the general contractor, the landowner, tenant and lender with a copy of our analysis. Shortly thereafter, and prior to filing the lawsuit, the landowner demanded that the contractor pay off the lien claim, and so our client was paid in full.