How Will XL and BMO Harris Bank Cover Truland Losses?
XL’s Response
Not so fast, replies XL in a response submitted to the court last month.
"Unlike the Trulands' marital home," XL's attorneys wrote in a pleading filed on Oct. 9, "there is no provision in the Indemnity Agreement that exempts living expenses and professional fees from the trust imposed on Mr. Truland's assets.
"Mr. Truland does not have any contractual basis to fund living expenses and professional fees from assets dedicated to XL," wrote XL's attorney.
Robert Truland also has no right to preserve all of his 401(k) and 408(b) retirement accounts, either, XL's counsel argued. Virginia, not Maryland law, applies to Robert Truland's obligations under the surety indemnification.
"Mr. Truland did not bargain to exempt his retirement accounts from the trust imposed on the assets he dedicated," XL's attorneys wrote.
Other creditors in the Truland Group failure are also staring at big potential losses. Sunbelt Rentals filed claims against three Truland companies for $329,800 each. The Internal Revenue Service filed two claims for a combined $440,600 against Truland Group and Truland Walker Seal Transportation.
In addition to XL and BMO Harris Bank, the other creditors include rental companies, contractors and subcontractors. In total, the 83 claims made so far add up to more than $30 million, although some claims appear to be duplicates.
The last date to file claims with most of the Truland Group companies is Dec. 31, 2014. Until then, creditors will not know how much they can expect to receive, if anything, from the liquidation. In the latest effort to recover funds, more than 30 Truland cars, vans and trailers sold at auction for a combined $213,015.
According to the U.S. Army Corps of Engineers, fixing the arc-flash problems on the Utah data center cost millions of dollars. Truland's arbitration on the final settlement with prime contractor Balfour Beatty-DPR-Big D was temporarily stayed by the bankruptcy. Truland Group may have lost money on the job—one of Truland's main subcontractors is suing for unpaid work—but the final payout could add many millions of dollars to funds available to creditors. No matter what happens, the full story of Truland's downfall has yet to be told.
