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A trust fund claimant has the first right to collect
from receivables generated on the project,
free from the lender’s security interest.
used to pay him or her. When the right
of the distressed contractor to use
the funds to pay professional fees is
in question, it may be best to require
payment of those fees by a principal of
the distressed contractor and to take
steps to insure that trust funds are
not used as the source of payment.
Typically, there is no right to file
construction liens on public
projects, nor are builders’ trust
funds applicable to these projects.
Instead, state and federal laws require
that a contractor post payment
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Creative capital to boost small business.
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