'Big Dig' Builder Files For Protection
The petition for bankruptcy protection was brought about by the company's failure to get paid for work done on behalf of the Massachusetts Highway Dept. and the Massachusetts Turnpike Authority.
June 28, 2008
Modern Continental Construction Co., the Dedham Mass-based builder involved with the Big Dig project in Boston, filed for bankruptcy protection in Boston just days after it was charged by federal regulators with false statements about the quality of construction in two Boston public works projects. The company has asked for court approval to use cash collateral to make its payroll.
The case, a Chapter 11 petition, is being overseen by Judge William Hillman. Harold Murphy of Hanify & King in Boston is debtor counsel.
In July 2006, the I-90 tunnel in Boston, better known as The Big Dig, had a ceiling collapse that killed a motorist, Milen Del Valle. The following month a suit was filed alleging wrongful death and negligence. The debtor, a closely-held Massachusetts corporation that is 40 years old, is the largest heavy civil construction company in the Northeast US and it is one of the largest in the nation. Modern Continental was the largest contractor in terms of the dollar amount of contracts awarded on the Big Dig project.
According to court documents the petition for bankruptcy protection was brought about by the company's failure to get paid for work done on behalf of the Massachusetts Highway Dept. and the Massachusetts Turnpike Authority. "The authority has not paid the debtor for work completed after October 2007 and the debtor not been paid for significant work it performed due to the authority's refusal to approve change orders," according to court documents.
Three days before filing for bankruptcy, the builder was charged in federal court with making false statements in connection with its execution of construction documents certifying the quality of the work it performed on certain contracts related to the Central Artery/Tunnel Big Dig Project, submitting false time and materials slips on contracts, and with wire fraud.
United States Attorney Michael J. Sullivan and others alleged that the builder made false statements concerning the quality of the construction work it performed on two contracts, construction of the Tip O’Neil Tunnel from Congress Street to High Street and finish work in the I-90 Connector Tunnel.
The allegations suggest the builder "knowingly executed documents stating that the two contracts were built in accordance with the contract documents and procedures, when in fact [it] was aware that it had not built the contracts in accordance with those documents and procedures."
On September 15, 2004, a defect in slurry wall panel caused a slurry wall to blowout, resulting in extensive traffic delays and, ultimately, the discovery of numerous other unrepaired defects in the slurry walls built by Modern Continental. On July 10, 2006, a ceiling module installed by Modern Continental in the portal area of the I-90 Connector tunnel, using concrete anchors installed with epoxy, collapsed and killed a motorist passing through the tunnel. After the collapse, a tunnel inspection revealed a systemic failure of the epoxy anchors throughout the tunnel.
In both instances, MCC was aware at, or near, the time it constructed the slurry walls and the installed the tunnel ceiling that it was not adhering to the contract documents, the US attorney alleges. "Specifically, MCC knowingly failed to properly and fully execute concrete placement cards documenting the pouring of the concrete in the slurry walls, knowingly failed to meet the written specifications for the slurry mix used in the construction process and knowingly signed a certification that panel EO-45, among other defective panels, was built to specifications when MCC was aware it was not.”
Unsecured creditors include Hilb Rogal & Hobbs, Architectural Paving, City Lights Electrical and Welsbach Electric Corp.
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