[WSBARP] Priority lien question related to premises operating equipment

[Bryce Dille]

LL has statutory LL lien under RCW 60.72.010 for last two month rent and is prior to all liens except taxes, labor liens, and liens of security interests recorded prior to tenancy but the two months is measured from when action to foreclose is instituted.

From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Anthony Gibbs
Sent: Monday, April 20, 2020 12:49 PM
To: wsbarp at lists.wsbarppt.com
Subject: [WSBARP] Priority lien question related to premises operating equipment

Client has asked about the following scenario:

Client’s has two leases (kitchen, office) and a premises operating agreement with a tenant that allow the tenant to book and hold events in Client’s event venue. All agreements are in the same building. The tenant is in the hospitality industry and faces extremely uncertain times, with the potential of bankruptcy/closing business down. Tenant is currently in default of the operating agreement but current on both leases.

Client would like to both work with tenant and protect its interests and has asked if:

(1)    It could enter into an agreement with T by which T agreed to transfer the kitchen equipment to client to offset client’s losses and allow it to take over T’s events if T is forced to close/claim bankruptcy. An agreement analogous to a liquidated damages clause or secured property interest to secure T’s performance. I’m concerned this could run afoul of fraudulent transfer rules if bankruptcy.

OR
(2)    Obtain a priority lien from T in exchange for a few months of grace period for T to try and weather the COVID storm.

Would appreciate some thoughts to help the analysis.

Thanks!
--
Anthony F. Gibbs
Attorney/Owner
Felix Advocates PLLC
Phone: 206.429.5259
Fax: 206.238.9172
www.felixadvocates.com<http://www.felixadvocates.com>

Felix Advocates PLLC Locations
1455 NW Leary Way, Ste 400, Seattle, Washington 98107
15600 Redmond Way, Ste 101, Redmond, Washington 98052
1435 W Valley Hwy N, Auburn Washington 98001-4124
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