In Re: El Dorado Improvement Corporation, Debtor. Sundt Corporation v. Dynamic Finance Corporation

One commentator describes the frontier equivalent of mechanic’s hens:

What this regime lacked in due process, it made up for in clarity, the importance of which is driven home by the somewhat opaque issue we tackle in this case: whether a South Lake Tahoe redevelopment project was “subject to acceptance by any public entity” under California’s mechanic’s hen law.

1. The redevelopment project at issue was a public-private joint venture between the South Tahoe Redevelopment Agency (the “Agency”), a municipal agency, and El Dorado, a developer and landowner. The project was intended to address urban blight in the City of South Lake Tahoe, and envisioned construction of a luxury hotel, marina building and parking structure, as well as an artificial wetland and estuary and a view corridor to the lake.

The City enacted a redevelopment ordinance, and El Dorado and the Agency signed a Disposition and Development Agreement (the “Agreement”) spelling out their respective duties. The Agreement required the Agency to acquire various properties and exchange them for properties El Dorado owned. El Dorado would then oversee construction of the project, while the Agency would pay for…