Some of the issues that led a local construction firm into bankruptcy were made a little clearer last week.
MGT Construction, the arm of local real estate firm Thalhimer that was put into Chapter 7 bankruptcy liquidation in late February, filed documents in bankruptcy court that show a detailed list of more than 500 creditors owed a total of $28.2 million, dozens of pending or potential legal disputes, and a breakdown of its revenue in recent years.
The filing also shows there’s not likely much for creditors to go after from MGT, as the company claims only $51,000 in assets, the bulk of which is accounts receivable.
MGT’s largest creditor is listed as Morton G. Thalhimer Inc., the formal name of the Thalhimer parent company under which the construction company, the Cushman & Wakefield brokerage and Thalhimer Realty Partners investment arms operate.
The parent company is owed $14.88 million for “loans, advances, etc.,” money it apparently sent down to the construction subsidiary leading up toward the end of last year when the decision was made to wind down MGT.
The second-largest creditors are two affiliates of locally based developer Genesis Properties, which hired MGT as general contractor on its Shockoe Valley View Apartments and Hatcher Tobacco Flats. One of those Genesis claims is for $2.2 million, a dispute for which the filing says is in mediation. The other is for $882,000, which the filing says is tied to pending litigation.
The bulk of the creditors listed are subcontractors and suppliers owed a range of hundreds to hundreds of thousands of dollars.
The filings help give a peek at the volume of projects MGT had in the pipeline over the years. A list of projects still under warranty shows dozens that MGT completed dating back through 2013.
That work led to $55 million in revenue for calendar year 2016, according to the filing. That figure dropped to $42 million in 2017.
The filing lists about 60 pending and potential legal claims against MGT, a few of which it has filed counterclaims for.
Many of the disputes are with subcontractors related to just a few projects, including the two Genesis properties and those who did work for MGT on a project in Norfolk at 450 Bousch St., developed by Marathon Development.
The largest legal claim in the filing is $5 million related to a project in Tulsa, Oklahoma, a development that was owned by Richmond-based Larson Development. That project led to lawsuits from both sides, according to local news reports there.
The filing shows Thalhimer CEO Lee Warfield, CFO David Dustin and executive vice president Evan Magrill all had been directors at MGT through the end of 2017.
Others listed as MGT directors over the last year were president Michael Logan Sr., who left the company in January, his son Michael Logan Jr., who worked in business development at the firm, and Rochelle Aprigiliano, a former Thalhimer controller who left in mid-2017.
MGT’s lone employee presently is Mike Kain, a consultant hired in January to take over for Logan as president and to take on the role of MGT’s chief restructuring officer.
The trustee overseeing the liquidation is local attorney Harry Shaia Jr. of Spinella Owings & Shaia.
A creditors meeting for the Chapter 7 case is set for April 3 at 9 a.m. before Judge Kevin Huennekens.
Richmond firm Spiro & Browne is handling MGT’s case.
The Thalhimer parent company has retained Peter Barrett of Kutak Rock to represent its interests in the bankruptcy case.