MGT creditor wants freed from bankruptcy freeze

mgt construction sign

An MGT Construction sign on Porter Street in Manchester. (Kieran McQuilkin)

A subcontractor wants permission to continue its four-year legal fight against MGT Construction, the longtime local firm whose bankruptcy filing last month put a hold on the two sides’ dispute over six figures’ worth of allegedly unpaid work from a pair of projects in Manchester.

CentiMark Corp., a national roofing contractor with a presence in Richmond, has asked the federal bankruptcy court for a so-called relief from stay, which would allow it to undo the freeze that MGT’s Feb. 22 Chapter 7 liquidation filing put on a lawsuit that dates back to 2014, as well as the dozens of other ongoing and potential legal disputes MGT cites in its bankruptcy records.

CentiMark’s case in Richmond Circuit Court stems from work it did on the Hopper Lofts at 701 Maury and Stella 360 apartments at 310 Stockton St., two Southside redevelopments for which MGT was general contractor.

The company claims it was hired in 2011 by MGT as a subcontractor to put roofs on the two projects for a total of $833,000. CentiMark claims it completed the jobs, but is still owed a total of $265,000, nearly all of which stems from the Hopper project.

CentiMark eventually filed liens over the unpaid bills and ultimately the circuit court suit seeking a judgment to enforce the validity of the liens and try to force the project’s insurance bonding company to pay what’s owed.

Now left to stand in line among MGT’s more than 500 creditors – who are owed a combined $28 million – CentiMark argues that its long-running suit is far enough along that it should be allowed to proceed outside the protection of the Chapter 7 filing.

It argues that all sides have filed respective responses and the lawsuit is “ripe for trial.”

“It would be a waste of resources of this court, and of the parties, to move the case to a new forum at this late stage of the litigation,” CentiMark’s March 14 filing argues.

The company also argues that the bonding company, Hartford Fire Insurance, would be liable for the full amount of what’s owed if the lien is found to be valid, and therefore the case would eliminate a creditor off MGT’s long list.

CentiMark is represented in the case by Stephen Scarce, Trevor Reid, Meredith Yoder and Dimitrios Karles of Parker, Pollard, Wilton & Peaden. Scarce did not return a call seeking comment on Friday.

A subsidiary of local real estate firm Thalhimer, MGT was put into bankruptcy as part of a winding down process of the nearly three-decade-old general contractor.

It claims to have only $51,000 in assets, leaving little initial evidence that there will be much left for creditors.

Its largest creditor is listed as Morton G. Thalhimer Inc., the formal name of the Thalhimer parent company under which the Cushman & Wakefield brokerage and Thalhimer Realty Partners investment arms also 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. Those disputes are for claims of around $3 million and are subject to litigation.

The bulk of the creditors listed are subcontractors and suppliers owed a range of hundreds to hundreds of thousands of dollars.

CentiMark is the first of MGT’s creditors to file for relief from stay, but others could follow as many of the creditor claims are listed as being subject to bond claims, according to court filings.

MGT is represented in its Chapter 7 case by David Spiro of Spiro & Brown. An email to Spiro was not returned by press time.

mgt construction sign

An MGT Construction sign on Porter Street in Manchester. (Kieran McQuilkin)

A subcontractor wants permission to continue its four-year legal fight against MGT Construction, the longtime local firm whose bankruptcy filing last month put a hold on the two sides’ dispute over six figures’ worth of allegedly unpaid work from a pair of projects in Manchester.

CentiMark Corp., a national roofing contractor with a presence in Richmond, has asked the federal bankruptcy court for a so-called relief from stay, which would allow it to undo the freeze that MGT’s Feb. 22 Chapter 7 liquidation filing put on a lawsuit that dates back to 2014, as well as the dozens of other ongoing and potential legal disputes MGT cites in its bankruptcy records.

CentiMark’s case in Richmond Circuit Court stems from work it did on the Hopper Lofts at 701 Maury and Stella 360 apartments at 310 Stockton St., two Southside redevelopments for which MGT was general contractor.

The company claims it was hired in 2011 by MGT as a subcontractor to put roofs on the two projects for a total of $833,000. CentiMark claims it completed the jobs, but is still owed a total of $265,000, nearly all of which stems from the Hopper project.

CentiMark eventually filed liens over the unpaid bills and ultimately the circuit court suit seeking a judgment to enforce the validity of the liens and try to force the project’s insurance bonding company to pay what’s owed.

Now left to stand in line among MGT’s more than 500 creditors – who are owed a combined $28 million – CentiMark argues that its long-running suit is far enough along that it should be allowed to proceed outside the protection of the Chapter 7 filing.

It argues that all sides have filed respective responses and the lawsuit is “ripe for trial.”

“It would be a waste of resources of this court, and of the parties, to move the case to a new forum at this late stage of the litigation,” CentiMark’s March 14 filing argues.

The company also argues that the bonding company, Hartford Fire Insurance, would be liable for the full amount of what’s owed if the lien is found to be valid, and therefore the case would eliminate a creditor off MGT’s long list.

CentiMark is represented in the case by Stephen Scarce, Trevor Reid, Meredith Yoder and Dimitrios Karles of Parker, Pollard, Wilton & Peaden. Scarce did not return a call seeking comment on Friday.

A subsidiary of local real estate firm Thalhimer, MGT was put into bankruptcy as part of a winding down process of the nearly three-decade-old general contractor.

It claims to have only $51,000 in assets, leaving little initial evidence that there will be much left for creditors.

Its largest creditor is listed as Morton G. Thalhimer Inc., the formal name of the Thalhimer parent company under which the Cushman & Wakefield brokerage and Thalhimer Realty Partners investment arms also 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. Those disputes are for claims of around $3 million and are subject to litigation.

The bulk of the creditors listed are subcontractors and suppliers owed a range of hundreds to hundreds of thousands of dollars.

CentiMark is the first of MGT’s creditors to file for relief from stay, but others could follow as many of the creditor claims are listed as being subject to bond claims, according to court filings.

MGT is represented in its Chapter 7 case by David Spiro of Spiro & Brown. An email to Spiro was not returned by press time.

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Fred Squire
Fred Squire
4 years ago

No comments from anyone in the industry? Wonder why not?