Chapter 8 - § 8.4 OWNER — GENERAL CONTRACTOR BANKRUPTCY

• Jurisdiction: Colorado

§ 8.4 OWNER — GENERAL CONTRACTOR BANKRUPTCY

If the debtor is the owner of the property, the asset on which the lien claimant is secured will be administered by the bankruptcy court under the Code. However, the bankruptcy court may defer to the state court for decisions as to validity and priority of the mechanics' lien.

In In re SRKO Family Limited Partnership, U.S. Bankruptcy Court for the District of Colorado, Case No. 10-13186 SBB, the general contractor, GE Johnson Construction Company, Inc., filed a motion for relief from automatic stay "to permit the continuation of the state court litigation against the Debtor."

By this Motion, GE Johnson seeks relief from the automatic stay to: (i) continue certain state court litigation against the Debtor to determine as applicable the amount, extent, validity, priority, and ranking of mechanics' lien claims encumbering the Debtor's real property known as Colorado Crossing, Lot 1, Filing No. 1 ("Colorado Crossing Property"), and (ii) modify the ten-day stay imposed by Rule 400I(a)(3) of the Federal Rules of Bankruptcy Procedure to allow the relief granted to become effective immediately upon the entry of an order granting this Motion.
The relief requested herein does not include relief to enforce any mechanics' liens after their amount, extent, validity, priority, and ranking have been determined, as applicable, by the state court.
In addition to GE Johnson, the subject state court litigation involves some 40 plus mechanics' lien claimants. Prepetition the District Court of El Paso County, Colorado (the "State Court") issued partial judgments against the Debtor in favor of the mechanics' lien claimants. A court must still determine, however, the amount,

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