Construction Lien Vs. Mortgage — The Claim Priority War

Law360, New York (January 29, 2014, 1:04 PM EST) -- After the owner of a newly constructed hotel filed bankruptcy, the assignee of the construction mortgage sought a declaration that the mortgage had priority over the general contractor’s mechanic’s lien. The general contractor contended that its mechanic’s lien had priority, and filed a dozen counterclaims for good measure. After losing before the bankruptcy court and district court, the general contractor appealed to the First Circuit.

The history of the project is as follows:

December 2006: Debtor signed a contract with the general contractor (ROK) to build...
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