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Aaron, owner of ABC Development LLC (ABC), filed a lawsuit against XYZ Construction Company (XYZ). The suit claims XYZ used substandard materials for the construction

Aaron, owner of ABC Development LLC (ABC), filed a lawsuit against XYZ Construction Company (XYZ). The suit claims XYZ used substandard materials for the construction of 201 homes. After four years of arbitration, the case was finally settled for $50,000 in mid-2018.

Over the four year period, there were partial payments from XYZ :

Partial

Settlement

Disburse-

ments

Funds

Remaining

2015

5

1

4

2016

5

2

3

2017

5

3

2

2018

35

29

6

50

35

15

The funds were wired to the trust account of the attorney for ABC. After each payment was received, the attorney would pay off ABCs debt, including subcontractors, accountants, other attorneys, engineers, and architects, etc. The last disbursements were made in October 2018. The remaining funds were finally released to ABC in December 2018.

How would you advise Aaron?

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