A general contractor went bankrupt after receiving joint-payee checks from the project owner to pay suppliers. The bankruptcy trustee tried to recover these payments as preferential transfers (money given to creditors shortly before bankruptcy). The court ruled the payments were technically preferential but allowed the suppliers to keep the money because they provided new value by releasing their lien rights, which benefited the contractor.
Joint-payee checks from owners to pay your invoices may be recoverable by a bankruptcy trustee as preferential transfers if the contractor files within 90 days
You can protect yourself by ensuring lien waivers are exchanged for payment—this 'new value' defense shields you from having to return the money
Always document that you released lien rights in exchange for payment; this is your legal defense if the contractor later files bankruptcy