Do the liens come before mortgage in priority of payment

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Reference no: EM131148705

LaSalle Bank loaned $8 million to Cypress Creek 1, LP, to build an apartment complex. The loan was secured by a mortgage. Cypress Creek hired contractors to provide concrete work, plumbing, carpentry, and other construction services. Cypress Creek went bankrupt, owing LaSalle $3 million. The contractors recorded mechanic's liens when they did not get paid for their work. The property was sold to LaSalle at a sheriff's sale for $1.3 million. The contractors claimed that they should be paid the amounts they were owed out of the $1.3 million and that the mechanic's liens should be satisfied before any funds were distributed to LaSalle for its mortgage. The trial court distributed the $1.3 million primarily to LaSalle with only a small fraction going to the contractors. Do the liens come before the mortgage in priority of payment? Discuss.

Reference no: EM131148705

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