Commercial Litigation Involving Construction

Preserving the rights of a construction subcontractor when a general contractor files for bankruptcy is becoming more prevalent in these economic times. In one instance a general contractor that filed bankruptcy sought to bring an action against our client the HVAC subcontractor. However, they failed to disclose the claim against our client in their bankruptcy petition. The Appellate Division upheld the lower court’s decision that such failure precluded the adversary from seeking action against our client.

Supreme Court, Appellate Division, Second Department, New York.

May 3, 2004.
7 A.D.3d 514, 776 N.Y.S.2d 99

Background: Plaintiff brought suit to recover for work, labor, and services performed and materials supplied.

Decision: The Supreme Court, Appellate Division, held that plaintiff's failure to list cause of action as asset in its bankruptcy petition precluded it from pursuing cause of action on its own behalf.
Affirmed. Plaintiff's failure to list cause of action, in which it had interest, as asset in its bankruptcy petition precluded it from pursuing cause of action on its own behalf.

T. Kevin Murtha & Associates, P.C., Westbury, N.Y. for respondent.