|Fundraising. Auctioneer liquidates most of steel fabricator, but workers remain unpaid. Photo by Tim Grogan for ENR)|
AMEC Construction Management Inc. struck a deal with the bank and liquidation trustee for Interstate Iron Works Corp. to acquire much of the steel needed for the new New York Times Co. headquarters being built in Manhattan. The settlement avoided the need for New York City-based AMEC to bid for the steel at the two-day March 23-24 auction of the steel fabricator and erectors assets at its headquarters in Whitehouse, N.J.
Bidders paid a total of $3.56 million for the rest of Interstates assets, excluding its real estate. Interstate suddenly ceased operations Dec. 22, 2004, because AMEC cut its payments to Interstate while the firm struggled with drastically increased steel costs, the bankruptcy of its joint venture partner and other troubles, claims CEO Robert Abramson (ENR 3/21 p. 25).
Interstates shutdown sparked a battle for control of its assets between its clients and main lender, Valley National Bank. The bank is owed $17.2 million and is the biggest of Interstates many creditors. AMECs attorneys could not be reached for comment.
No bids were received for Interstates land, which would have required a minimum offer of around $6.07 million.
AMEC claimed in court filings that it had paid for and owned the Times project steel and demanded to take possession. Failure to obtain the steel could delay the project another 3.5 months, AMEC claimed. The contractor says it is hiring a new steel erector to frame the structure.
AMECs guaranteed price to the Times development partner, Forest City Ratner Cos., Cleveland, was above $350 million. Interstate had sought $8.3 million in a change order to cover the increase in the base price of the steel.
Under its deal with Valley National and the trustee, AMEC agreed to pay $850,000 for about 8,000 tons of fabricated steel and 88 trailers on which much of the steel is loaded, says Mo Bauer, an attorney whose firm is charged with liquidating Interstate.
Some former employees of Interstate say they are owed a weeks pay, as well as vacation pay and pension distributions, but have heard nothing since the companys sudden closing in December.
Jeffrey R. Frankenfield, an ironworker and longtime employee, says the firm promised to make workers a priority. "It is now over three months since the closure and we havent seen a dime," he says.
Abramson says employee retirement funds are being handled by two separate firms and that "everything is in settlement motion." As for unpaid wages, Bauer says it is unlikely that liquidation proceeds will be available to workers.