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Pandemic and Mechanic’s Liens Hurting Yardbird

wpengine August 3, 2020

In Other Commercial Credit News Mechanic's Liens & Bond Claims

The Future of Dining: Lessons from Yardbird’s Experience

Yardbird Southern Table & Bar (Yardbird) opened its Dallas TX location in March, just as the country began shuttering with the onset of the pandemic. We already know restaurants struggle in an excellent economy, but take into account the 40% spike in bankruptcy filings due to the pandemic, and what happens when you add in unpaid construction bills? Mechanic’s liens. Lots of expensive, title clouding, mechanic’s liens.

According to its website, Yardbird, founded by 50 Eggs, Inc., got its start in Miami and is well known for its southern hospitality and top-notch brunches. With additional locations now in Las Vegas, Dallas, Los Angeles, Singapore, and forthcoming DC, it appears to be thriving.

Unfortunately, the recently debuted Dallas location is burdened with some hefty mechanic’s liens. According to Construction Journal, the renovation of their 6,950 square foot leased location began August 2019 and was completed in March 2020. Construction completion did happen timely (an enigma in the construction industry), and Yardbird opened its doors. Folks were flocking to the hospitality hotspot – until they weren’t. Not long after its opening, the pandemic closed businesses across the country.

Mechanic’s Liens Start Rolling In

According to LienFinder™, in April, May, and June, lien claimants with combined claims of over $2,400,000 secured mechanic’s liens against the 2121 N. Pearl Street, Dallas TX restaurant. Claimants filed liens for millwork, doors/door frames, glass, artisan plaster, HVAC, painting, and supplies & labor for the construction of a patio.

The liens weren’t limited to subcontractors and materials suppliers, even general contractor Panterra Development Ltd. filed a lien, for over $1.2M including retainage.

Why weren’t the liens filed before the restaurant opened? Well, let’s think about it. In Texas, lien claimants serve notices of non-payment no later than the 15th day of the second month following each month in which they furnished. The mechanic’s lien isn’t filed until the 15th day of the fourth month following the last month in which they furnished. For those furnishing in February and March, lien deadlines were June and July, respectively.

How Will the Claimants Get Paid?

Now, if this were a “normal” economy, the restaurant would be bringing in money from its customers. Except right now, our economy and way of life are anything but normal. With a simple “We will be serving you again real soon!” on its website, Yardbird in Dallas is closed. Losing revenue by the day, it isn’t likely to recover quickly.

What is likely? If the property owner and/or tenant can’t pay the lien claimants, the claimants will need to proceed with suit to enforce their liens.

Time is ticking, as claimants must file suit to enforce their liens within 2 years from the last date the claimant could have filed a lien, OR within 1 year after completion of the original contract under which the lien is claimed, whichever is later.

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Pandemic and Mechanic’s Liens Hurting Yardbird

The Future of Dining: Lessons from Yardbird’s Experience

Mechanic’s Liens Start Rolling In

How Will the Claimants Get Paid?

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