Credit Managers Shed Light on Subchapter V Issues During Meeting with American Bankruptcy Institute

Several business-to-business (B2B) credit managers and bankruptcy attorneys from Lowenstein Sandler recently convened with the American Bankruptcy Institute (ABI) Subchapter V Task Force to exchange invaluable insights gleaned from their cumulative experiences in Subchapter V cases.These credit managers, who are members of the esteemed National Ass...
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When Management Objects to Filing a Mechanic’s Lien

Filing a mechanic's lien can be a challenging process. It's a way to try to secure your rights and receivables, and allows flexibility to extend credit you might not typically extend. Several benefits come out of filing a mechanic's lien. Firstly, it helps with legal protection and ensures payment from the customer. Mechanic's liens also benefit su...
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Customer Payments Are Slowing, CMI Shows

NACM's Credit Managers' Index (CMI) fell 1.4 points to 51.2 in October. The CMI remains just barely in expansion territory above 50 and its lowest levels seen outside of a recession, said NACM Economist Amy Crews Cutts, Ph.D., CBE."Respondents continue to note the financial stress of their customers, asking for term extensions, falling behind on pa...
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Dancing with Debt: The Texas Two-Step Bankruptcy

For the past several years, a number of Chapter 11 debtors, typically with significant mass tort exposure, have used a bankruptcy strategy known as the "Texas Two-Step" to resolve mass tort liability in a bankruptcy forum while shielding their operating businesses from the direct impact of bankruptcy.The name "Texas Two-Step" arises from a unique a...
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NACM’s Secured Transaction Services: An Extension of Your Credit Team

The construction industry presents unique challenges for credit professionals due to its complicated nature. For example, credit professionals must assess the risk associated with multiple parties involved in a single project. Cash flows in construction often depend on project milestones and payments, making it challenging to predict when and how p...
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Economy Flirts with Recession, CMI Shows

NACM's Credit Managers' Index (CMI) gained 1.8 points to 52.6 in September. The improvement is welcome, but the CMI appears stuck on the precipice of a recession in business activity, said NACM Economist Amy Crews Cutts, Ph.D., CBE."Over the first nine months of 2023, the CMI has been bouncing around levels suggesting business activity is about to ...
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When Customers Pushback on Preliminary Notices

Preliminary notices should not be overlooked in the complex world of construction and project management because they serve as the crucial foundation upon which the entire payment process hinges. A preliminary notice serves as a notification to the owner or general contractor of a construction project to notify them that a contractor, sub-contracto...
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The Costs of Customer Pushback Terms and Web Billing Portals

The practice of customer pushback on the payment terms offer by their vendors is forcing the hand of creditors. If they accept the longer terms demanded by the customer, it will be extremely difficult to return the terms to the previous level. If creditors deny the longer terms, they run the risk of losing their customer.It's the act of forcing the...
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Increased Fraud Schemes Threaten Government Projects

The Financial Crimes Enforcement Network (FinCEN) and Internal Revenue Service (IRS) Criminal Investigation Department issued a notice of attention to a notable increase in state and federal payroll tax evasion and workers' compensation insurance fraud in the residential and commercial real estate construction industries.Both payroll tax evasion an...
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Subchapter V Bankruptcy Becoming More Common

Subchapter V small business bankruptcies are up 43% year-over-year in August, the 13th consecutive month of increase. This upward trend is likely to continue through the rest of the year and beyond, said Andrew Behlmann, partner at Lowenstein Sandler LLP (Roseland, NJ)."Small businesses aren't able to go avail themselves of the capital markets to g...
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Statute Changes to New Mexico’s Mechanic’s Lien Law

New Mexico House Bill 179, signed into law by Governor Michelle Lujan Grisham, went into effect June 16, 2023. Under this new law, credit professionals must change the way they serve a copy of the recorded mechanic's lien to the owner for protection measures in New Mexico.Prior to this bill, New Mexico's lien laws did not require contractors to sen...
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Economic Uncertainties Continue to Impact the Construction Industry

Today's economic uncertainties are weighing heavily on the construction industry. For example, high inflation rates have caused higher construction costs. Supply chain and labor availability issues cause project delays, ultimately leading to a stunt in the growth of the construction industry across the nation. And despite the labor market's stabili...
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Bonding Off Liens: How Does it Work?

Bonding off, also known as "bonding around" liens, is a term used when a general contractor, owner or even in some cases, a subcontractor, are required to keep a property lien-free.A lender could make the requirements of a loan that the property be lien free. If anyone decides to lien the job, the lender could suggest or demand to bond around the l...
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Pricing Strategy: A Delicate Balance

Inflation slowed to 3% year-over-year in June, but commodity prices are still higher than they have been the last few years. As we learned during the pandemic, shipping delays and strong demand can send pricing soaring—and quickly. In order to mitigate risk when commodity prices increase, credit professionals must develop bulletproof pricing strate...
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Is Digital Currency the Future of Finance?

The rise of digital currencies could have a massive impact on financial systems, central banks and B2B trade as a whole. B2B payments have already come a long way from cash and paper checks with the rise of ACH and credit cards. Now many are wondering if the future of finance is based around digital currencies.A recent eNews poll revealed 9% of cre...
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Protect Your Lien Rights for Private Projects in Florida

Florida, like all states, has a construction lien statute for private projects so that trade creditors can protect their lien rights. But Florida is the only state with an additional form of protection for private projects called the Notification of Specialty Fabricated Materials. Specialty fabricated materials are materials manufactured specifical...
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Florida Changes Its Construction Lien Law

On June 12, Florida Governor Ron DeSantis signed House Bill 331 into law—which shortens the time period to bring defect lawsuits forward and modifies current private right of action against a contractor for violation of the Florida Building Code. The previous statute stated the time to commence an action began with the later of the date of actual p...
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Washington House Bill to Increase Bond Amounts

The new Washington State house bill passed on April 13, HB 1534, increases the required statutory registration bonds. The bill provides additional protection to trade creditors with increased oversight of contractors. "Under the current law, L&I can deny a contractor's application for registration if there is an unsatisfied final judgment again...
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NACM and the Birth of Credit Management: Celebrating 127 Years

On June 23, 1896, the credit profession as we know it today was born. America's credit managers heard O.G. McMechen's call to create a national association for business credit management, resulting in the formation of the National Association of Credit Men, which would eventually grow to become the National Association of Credit Management (NACM).I...
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Voices of Credit Congress: New Tools to Solve Old Problems

Credit professionals have an intrinsic thirst for knowledge. Education is power. And Credit Congress is the best event for trade creditors to attend best-in-class educational sessions all in one place, especially as the role of credit management constantly evolves.More than 800 trade credit experts from all backgrounds, industries and experience le...
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