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Andrews Myers
We Mean Business in Texas
Construction
Short but not Sweet: Lender-Required Consents and Subordinations from Contractors
by Susan George & Mike Cortez Ideally, once a developer breaks ground on a project, they can proceed seamlessly to the completion and opening of the project without issue. Unfortunately, this is not always the case. Circumstances can arise mid-construction that bring a developer’s operations to a halt. 

This scenario poses a significant risk to construction lenders. They likely have rights to foreclose upon the project, but if they exercise those rights and take ownership of the project, they acquire a work in progress. To address this risk, in addition to the right to foreclose, the lender will want to be able to acquire direct rights under the developer’s contracts for work on the project, as well. 

Construction lenders typically require collateral assignments of a developer’s contracts with their general contractor, architect, project engineer, and perhaps other professionals involved in the project as well. The lender will require its borrower to obtain the consent of each such professional to the assignment of their contract prior to closing the loan. Many times, these agreements are presented at the eleventh hour prior to closing.  Read more...
Negotiating & Navigating a Pay-if-Paid Provision
by Lauren Scroggs The risk that a project owner won’t pay is a substantial one. Rather than absorb this risk, general contractors pass down the risk to subcontractors in “contingent payment” provisions also known as “pay-if-paid” provisions. Pay-if-paid clauses make a general contractor’s obligation to pay its subcontractor contingent on when and whether the general contractor receives payment from the owner. A subcontractor with a pay-if-paid provision in its subcontract could face lengthy payment delays or, in some cases, see no payment at all. Though prohibited in some states, pay-if-paid clauses are fully enforceable in Texas…with three notable caveats.  Knowing these caveats can help subcontractors both negotiate and navigate the contingent payment provision in their subcontracts. 

First, the Texas Business & Commerce Code allows a contingent payee (typically, the subcontractor) to object to the enforcement of a pay-if-paid clause by giving notice to the contingent payor (typically, the general contractor). The notice must meet certain timeframe and content requirements and is defeated by a general contractor’s response that the withholding is due to the subcontractor’s failure to meet contractual obligations. Because the objection can be refuted and does not cover labor and materials provided before the objection is made, it has limited effectiveness. Read more...
 
Super Lawyers:
Top Women Attorneys
Four attorneys from Andrews Myers were recognized in the 2022 Texas Top Women Lawyers list published by Thomson Reuters Super Lawyers in Texas Monthly. All four were named to the 2021 Thomson Reuters Texas Super Lawyers® or Texas Rising Stars lists.
 
Rising Star in Business Litigation - Emily Miller
Rising Stars in Construction Litigation - Katy Baird & Brittany Cooperrider
 Super Lawyer in Employment and Labor - Elaine Howard

 
Covering more than 70 practice areas, Thomson Reuters Super Lawyers® is a directory of lawyers who have attained a high degree of peer recognition and professional achievement. The annual selection process includes a statewide survey of lawyers, independent research of candidates, and peer reviews by practice area.
Litigation
Lender Liability Claims - Alive and Well in Texas!
by Jim Aycock The 1980s were a period of big hair, big cell phones, and big problems for the banking industry in Texas. As the economy declined, “lender liability” type claims emerged and flourished. As a result, the 1980s and early 1990s were a period that most experienced bankers in Texas would frankly like to forget. It was also a time, however, that many of today’s younger bankers never experienced, since many of them were infants, or perhaps not even a twinkle in their parent’s eyes at the time.

Since then, for the most part, Texas has been blessed with a strong and growing economy, healthy banks, and prosperous times.  As a result, lender liability claims have not garnered the same level of attention they once received. In fact, I occasionally hear some lenders take the position that lender liability claims are a relic of the past, never to be seen again.  However, a recent decision issued by the U.S. Bankruptcy Court in Dallas illustrates that lender liability claims are still very much alive and well in Texas. Read more...

 

AGC Volunteer of the Year
Earlier this month, Tony Stergio was presented with AGC Houston's first-ever William H. Scott III Volunteer of the Year Award - recognizing a member who has gone above and beyond to help support the chapter and the industry.
AGC Houston thanked Tony for stepping up for the industry in a big way during the pandemic to provide the chapter and its members with constant updates and guidance on employment law and the ever-changing dynamics. Tony also frequently speaks at the association's Safety and Employment Practices Committee meetings. Tony is pictured above with Kyle Holland, AGC Houston's President, and Bill Scott, the namesake of this new award.
Employment
Fifth Circuit Rules Against United Airlines Accommodation for Vaccine Mandate
by Tony Stergio  On February 17, 2022, a split Fifth Circuit panel ruled that United Airlines could not accommodate employees, who received religious exemptions from its COVID-19 vaccine mandate, by merely placing them on indefinite unpaid leave. According to United, about 2,000 of its employees have been granted religious or medical accommodations with respect to its vaccine mandate. Any employee who directly interacts with customers, like flight crews, that had received a vaccine exemption was placed on indefinite unpaid leave but got preferential consideration if they applied for job openings that were not customer-facing.

The divided Fifth Circuit panel held that the accommodation offered was insufficient. Had United offered an accommodation that let the employee go back to work with masks, social distancing, and weekly COVID-19 testing, the panel likely would have ruled in favor of such an accommodation.

It is important to note that the Fifth Circuit’s decision is extremely narrow and did nothing to strike down United’s mandatory vaccination policy. Employers with mandatory vaccination policies should, however, consider this ruling when deciding how to accommodate employees who receive religious or medical exemptions. Read More...
 
About Andrews Myers
Where to find Andrews Myers
02/25 - AGC Houston EPC Committee with Tony Stergio
03/02 - SPONSOR CREW Houston Luncheon
03/02 - AGC of TX Austin Area March Membership Luncheon
03/03 - SBOT Construction Law Section Conference 
03/09 - HCA Employment Seminar with Tony Stergio
03/10 - SPONSOR Ruth Bader Ginsburg Exhibit Opening
03/15 - ABC National Conference
03/24 - HCA Forecast Luncheon
03/28 - AGC National Conference
04/01 - SPONSOR ASA Houston Golf Tournament
04/01 - SPONSOR HCA Clay Shoot
Andrews Myers, PC
Founded in 1990, with offices in Houston and Austin, Andrews Myers, Attorneys at Law, is a corporate law firm and recognized market leader in Texas construction law.  The firm focuses on the concentrated disciplines of commercial litigation, construction, commercial real estate, corporate and business transactions, with additional emphasis on related issues including bankruptcy and insolvency, energy, employment and capital formation. A seasoned team of attorneys provides timely and cost-effective solutions to the most complex problems facing entrepreneurs and middle-market industry leaders throughout the state and the nation. For more information please visit www.andrewsmyers.com.
COVID-19 Updates
Andrews Myers attorneys have been tracking and updating the many changes that could effect you and your business throughout the ongoing COVID-19 Pandemic. To see all of the articles and information you may have missed, please visit our dedicated COVID-19 page on AndrewsMyers.com

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