Table of Contents

Executive Committee: Message from the Chair…………………………………………………………..4

BLN Editorial Board: Message from the Editor……………………………………………………………6

When a Nonprofit Corporation Is Insolvent…………………………………………………………………7
By Reno F.R. Fernandez and Lisa A. Runquist
Just as the formation and administration of a nonprofit corporation requires special considerations and planning, the disposition of an insolvent nonprofit is governed by special statutes and rules. Boards of directors need specific guidance when a nonprofit enters insolvency. This article discusses the choices a California nonprofit public benefit corporation faces when it can no longer meet its financial obligations.

A Discussion of the Effect of the Insolvency of a Construction Company on the Priorities of a Secured Creditor………………………………………………………………………………..13
By James C. Bastian, Jr. and Melissa Davis Lowe
A construction company engaged in a public works project may obtain a bond and enter into agreements to ensure completion of the project with a surety. If the construction company fails to complete the work or pay subcontractors or suppliers, the surety may step in and perform. In addition to a surety, a construction company may owe debt to secured lenders. This article discusses the interplay between sureties and secured lenders and other creditors when a construction company defaults.