Angeles Electric Co. v. Superior Court

Opinion

EPSTEIN, Acting P. J.

A subcontractor on a construction project received payment for an antecedent debt from a general contractor. As a result, the subcontractor released its mechanic’s lien against the project owner’s property. The general contractor then made an assignment for benefit of creditors. In this case of first impression in California, we hold that release of the mechanic’s lien did not constitute “new value” to the general contractor under the contemporaneous exchange exception to the rule allowing an assignee for benefit of creditors to recover preferential payments.

Factual…