MOLDER’S LIENS AND SPECIAL TOOL LIEN ACT CLAIMS
At no time has the protection of legal rights been more important in the automotive industry. Michigan law has improved the rights of companies that manufacture parts, as well as companies that build tools and machines that make those parts. The Michigan Molder’s and Special Tools Lien Acts allow most companies involved in the plastic and metal part supply chain to secure their right to be paid in the event of a customer insolvency, provided that certain preliminary steps are followed.
The two laws are similar in their structure and remedies, but apply to two different industries. The Molder’s lien act protects the makers of plastic parts and the related machine and tool makers. See MCLA 445.611 et seq. The Special Tools Lien Act protects metal part makers, and the machinery and tooling suppliers to the metal part makers. See MCLA 570.541 et seq.
These statutory liens are effective against a tool or machine to enforce payment for those items, or for the unpaid price of parts made with a customer’s tool or machine. To receive this protection, however, the client must follow certain protocols regarding labeling and filing a form with the correct state agency. Also important is a review of the pertinent customer contract for clauses that may attempt to limit these rights.
With bankruptcy having become commonplace among manufacturers, business owners must be agile in their efforts to obtain legal protection. The attorneys at Kotz Sangster are very familiar with these issues and have had substantial involvement in a number of cases in which tool lien issues have been litigated.