The City of Petaluma owns the Redwood Empire Sportsplex that it leased to a developer for the purpose of constructing a sports complex. The developer contracted with North Bay Construction Company, a licensed paving contractor, to perform grading work at the property. North Bay completed the paving work but has not been paid. North Bay recorded a mechanic's lien against the property and served a Notice of Potential Claim on the City advising it that, as the owner and lessor of the property, it may be responsible for the reasonable value of the material and labor provided by North Bay. North Bay brought a cause of action to foreclose on the mechanic's lien. What is the city's best defense?
A) That is was only a landlord and cannot ever be liable for the acts of a tenant
B) That paving is not an improvement for which a lien can be filed
C) That liens cannot be made against government entities without their express permission
D) That liens must be filed prior to beginning work
Question 2
In a Chapter 11 rehabilitation plan, the debtor is able to do all of the following except:
A) keep all of the assets (both exempt and nonexempt).
B) remain in business.
C) make a settlement that is acceptable to the majority of the creditors.
D) make a preferential transfer to self-settled trust.
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