The Homeowner Construction Lien Recovery Fund (the Fund) within the Department of Energy, Labor & Economic Growth announces that effective today, October 19, 2009, all payments from the Fund are on hold until the Motion For Interpleader filed in Macomb County Circuit Court has been ruled upon.  In simple terms, the Fund is essentially insolvent with no current mechanism for securing funds sufficient to allow it to continue to defend the several hundreds of lien claims in approximately 250 lawsuits currently outstanding. 

Since early spring of this year, the department met with the Fund's stakeholders in an attempt to resolve the Fund's funding issue.  It became apparent in late September that an adequate funding source would not be found.  Therefore, the Fund has filed a Motion For Interpleader in an attempt to drastically reduce its legal costs while permitting an equitable distribution of funds.

The Fund has chosen the path of interpleader in the hope that the small business suppliers and subcontractors, people without legal recourse other than from the Fund, might at least get some of what they would otherwise have been entitled to under the law - if the Fund had money.  Equity for the claimants with what remains in the Fund is our only goal.

As long as the statutory provisions of the Fund are in place, the Fund is statutorily required to continue to collect the Fund revenue through the licensure process in addition to restitution payments to the Fund.  This anticipated revenue is simply not enough to sustain the viability of the Fund.

On November 2, 2009, a hearing on the Fund's Motion for Interpleader was held in the Macomb County Circuit Court. The Court has taken the Motion under advisement and is expected to issue its ruling by November 16, 2009.

Further updates will be posted as additional information becomes available.