Contractor Seeks Bankruptcy After Union Pension Fund Judgment
A Tennessee contractor that the bricklayers' union says owes more than $6 million to a union pension fund has filed for bankruptcy protection.
Nashville-based masonry contractor Wasco Inc. and its Columbia, Tenn., subsidiary, Lovell’s Masonry Inc., filed Jan. 6th in the Middle District Court of Tennessee.
A press release from the company implies that the Chapter 11 bankruptcy filing was triggered by an October judgment against Wasco and Lovell connected to litigation against the company a bricklayers' union pension fund.
The suit involves liability payments from the masonry firms’ withdrawal from a plan agreement with a local of the Bricklayers and Allied Craftworkers Union. The fund involved is the Bricklayers and Trowel Trades International Pension Fund.
In the January 8 press release, Wasco chief executive William Sneed says, “We are sound and profitable. Chapter 11 allows us protection as we continue to do business as usual.”
Sneed says he “felt our only viable option at this point is to voluntarily file to restructure, giving us the benefit of placing a ‘stay’ or ‘hold’ on our ongoing litigation with the Pension Fund allowing us time to work towards a solution.”
Wasco and Lovell’s also filed motions on the 6th for orders to authorize payment to pre-bankruptcy “compensation, employee reimbursements, withholding taxes, as well as contributions, costs and expenses incident to certain employee benefit plans” and orders of assurance of payment to utilities.
The pension fund tops the list of creditors in the Wasco bankruptcy, describing a $4,531,300 contingent, unliquidated, and disputed claim.
The bankruptcy filings for Wasco estimate between $1 million and $10 million in assets, and $10 million to $50 million in liabilities. Aside from the fund’s claim, the remaining top 19 creditors’ unsecured claims amount to approximately $1.8 million.
Similarly, the Lovell’s bankruptcy filings describe between $500,000 and $1 million in assets, between $1 million and $10 million in liabilities, a $1,014,345 claim by the fund, and around $54,000 in other unsecured claims.
In May 2013, pension fund trustees filed suit in District of Columbia district court against Wasco and Lovell’s for failing to make withdrawal liability payments since the fund notified the firms of their withdrawal under the Employee Retirement Income Security Act (ERISA) in Dec. 2011.
After the October judgment in its favor, the fund filed an updated statement of relief sought, requesting $1,481,096 in missed withdrawal liability payments, interest, damages and additional fees.
According to the fund plan agreement, Wasco owes a total withdrawal liability of $4,964,294, and Lovell’s owes $1,179,483.
The disputed withdrawal liability applies to employment of bricklayers' Local 5 of Tennessee members. The local was consolidated in July 2013 with other locals across numerous states to form the bricklayers' Local 8 Southeast.
The meeting of creditors in the Wasco and Lovell’s case will take place on February 12. The national bricklayers union did not respond to a request for comment.