Durr Mechanical Construction, Inc. files Chapter 11 with $122 million in unpaid debts

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Durr Mechanical Construction's website.
Durr Mechanical Construction's website.

Privately held Durr Mechanical Construction (DMC) has filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of New York. The business says it hasn’t been paid by three major creditors, including The New York City Department of Environmental Protection (NYC-DEP).

The company, a mechanical contractor specializing in the installation, rigging, setting, assembly, alignment and grouting of assorted process and power equipment, is represented by Adam P. Wofse of LaMonica Herbst & Maniscalco, BankruptcyData reports.

DMC’s petition outlines between 200 and 1,000 creditors; estimated assets between $100 million and $500 million; and estimated liabilities between $50 million and $100 million.

Documents filed with the court list the company’s three largest unsecured creditors as Amquip Crane Rental LLC ($2,290,147.61 disputed trade claim), Analytic Stress Relieving, Inc. ($296,294.75 disputed trade claim) and Apache Industrial United, Inc. ($516,680.50 disputed trade claim). Court documents also state that during 2016 and 2017 DMC’s gross sales exceeded $54,600,000 and $197,860,000, respectively.

In a declaration in support of the Chapter 11 filing, Kenneth A. Durr, DMC’s president and treasurer, says the “Debtor requires the benefit of the automatic stay and powers afforded to a debtor in possession so as to adequately operate its business in a wind down fashion to close out jobs, and prosecute its valuable affirmative claims.”

“After careful consideration, and after exhausting all available remedies outside of a chapter 11 filing, DMC has determined that it requires the protection offered by chapter 11. DMC intends to use the chapter 11 process to stabilize its limited operations and develop a reorganization through an orderly liquidation plan that will preserve value for all of its creditors and interest holders….DMC believes that based upon the current valuation of its assets, there will be funds sufficient to make a distribution to unsecured creditors.”

The Durr declaration details the impact of its inability to collect an estimated $122 million “in amounts due and owing in respect of three important contracts and the impact of that failure on its liquidity and further contractual relationships.”

“DMC has been experiencing severe cash flow issues primarily as a result of the failure of the two owners and one equipment manufacturer of three projects to timely pay—and their abject bad faith refusal to pay—amounts due and owing to the debtor in connection with those projects,” the bankruptcy filing says.

“Specifically, the equipment manufacturer and owners who have failed to pay are (a) Enexio US LLC (Enexio) (b) PSEG Fossil, LLC. (PSEG), and (c) the New York City Department of Environmental Protection (NYC-DEP),” the filing reports. “The aggregate sum due to the debtor from these (mostly) completed projects (and affirmative claims for damages as further set forth below) exceeds $122 million.

“As of the petition date, the Enexio and PSEG projects are 100% complete and the NYCDEP project is 98% complete…..DMC’s cash flow problems negatively affected its operations because certain subcontractors, vendors and/or creditors have (a) filed liens against projects, (b) filed claims against payment bonds, and/or (c) commenced litigation against DMC for nonpayment, all further exacerbating DMC’s distressed financial situation.”

DMC says in its filing that it is litigating against Enexio and PSEG, respectively, to collect the owed funds. With respect to the claims against NYC-DEP, claims have been filed with the NYC Comptroller’s office, the bankruptcy court filing says.

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