One of the biggest surety bond claim disputes in years inched closer to a trial last month when the parties agreed that separate lawsuits in federal court in Portland should be merged into a single case. At issue is whether a utility improperly terminated its contract with a power plant prime contractor, opening the way for the sureties to deny a possible $179 million claim.
Oregon-based Portland General Electric Co. filed a lawsuit in February, 2016 against sureties Zurich American Insurance Co. and Liberty Mutual Insurance Co. when the companies declined to respond to the utilities’ claim under their bonds. The two sureties argued that PGE had improperly terminated Abengoa Abeinsa, the Spain-based prime contractor that had completed some notable energy projects in the U.S. but had filed for bankruptcy or insolvency-type protection in courts in Spain and the U.S. The sureties had advanced $5 million to PGE to keep work going on the project in late 2015.