Won A $16k Judgment Against An Llc, Now They're Liquidating Equipment And I'm Worried I'll Never See A Dime. How Would You Handle This?

Location: Nebraska

I'm a small excavation contractor. Last year I sold about $15,400 worth of crushed concrete to another contractor who never paid me. Ended up taking them to court, got a default judgment in December, and with interest and costs they now owe me somewhere around $17k.

The judgment is against their LLC, not the owners personally.

We did a debtor's examination back in March and found out the company had a maxed out $100k line of credit, about $90k owed on a pickup, $54k owed on a skid steer, and a bunch of other equipment. Most of the financing is through the same local bank.

They also claimed to have about $98k in government receivables outstanding at the time, but I have no idea where that money ended up.

They auctioned off some attachments and miscellaneous equipment in April, bringing about $39k gross from the lots I've been able to identify. I never received a penny of it, despite the owner telling us during the debtor's exam that he'd pay my invoice out of those proceeds.

Now they're getting ready to auction off more equipment later this month, and I'm beginning to suspect they're completely liquidating the business.

My attorney has been working toward a sheriff's execution sale, which obviously isn't ideal for anybody. The debtor's attorney has now suggested making my company a joint payee on the upcoming auction proceeds check, along with the LLC and the bank.

Here's where I'm struggling.

If the bank is owed more than the equipment brings, I could end up with absolutely nothing. And if they're shutting the LLC down anyway, what incentive do they have to ever pay the remaining balance? They could file bankruptcy or just leave me with a judgment against an empty LLC.

From my perspective, I'd rather see the equipment bring good money at a regular auction than force a sheriff sale. But I also don't particularly feel like giving up the only leverage I have without some assurance I'm actually going to get paid.

I've even considered pushing for the bank to finance whatever shortfall remains on my judgment as part of the liquidation. I don't really give a shit whether the debtor owes me the money or owes the bank the money afterward. I just want my invoice paid.

I'm not looking to bankrupt anybody or make their life miserable. I delivered the material, they used it, and I expect to get paid for it.

So I guess my questions are:

• Would you use the threat of a sheriff sale to negotiate a guaranteed payment before agreeing to cooperate with the auction?
• Is there any realistic incentive for the bank to help settle a relatively small judgment to avoid complications with the liquidation?
• If the LLC sells everything and the secured creditors take all the proceeds, is there realistically anything left worth pursuing?
• Am I missing any leverage here?

I have an attorney handling the case, and obviously I'll be discussing any actual decisions with him. Just interested in hearing from people who've dealt with something similar, especially contractors, creditors, or attorneys who handle collections.

At this point I'm starting to think I might be completely screwed out of the money.