My last article examined strategies for construction managers facing an owner bankruptcy. Now, looking through the lens of the owner, let’s examine best practices when it is the contractor who has filed for bankruptcy.

Throughout New England and the United States the construction industry continues to thrive with several new projects underway and on the horizon. Last month, Dodge Data & Analytics projected that total U.S. construction will increase in 2017 by five percent. Lenders and sureties continue to aggressively underwrite contractors and subcontractors allowing businesses to grow quickly. But growing too quickly can lead to cash flow and labor allocation issues both of which are ingredients for a project bankruptcy.


Continue Reading Recipe for a Project Bankruptcy: Part 2 The Contractor in Bankruptcy Through the Lens of the Owner

My last article examined strategies for construction managers facing an owner bankruptcy. Now, looking through the lens of the owner, let’s examine best practices when it is the contractor who has filed for bankruptcy.

Throughout New England and the United States the construction industry continues to thrive with several new projects underway and on the horizon. Last month, Dodge Data & Analytics projected that total U.S. construction will increase in 2017 by five percent. Lenders and sureties continue to aggressively underwrite contractors and subcontractors allowing businesses to grow quickly. But growing too quickly can lead to cash flow and labor allocation issues both of which are ingredients for a project bankruptcy.


Continue Reading Recipe for a Project Bankruptcy: Part 2 The Contractor in Bankruptcy Through the Lens of the Owner

Pearl Jam CoverIn November 1989, I was a second year law student interviewing with firms in Connecticut and New York for a summer associate position.  During the Thanksgiving Holiday, I scheduled an interview with a small firm in New Haven.  The firm’s primary area of practice was construction litigation. I had no idea what “construction litigation” entailed,

I will be presenting at RCA’s 25th Annual Conference that runs Friday, March 13 through Sunday, March 15 in Las Vegas.

I’ll be kicking off the program on Saturday morning, presenting strategies for avoiding and addressing subcontractor defaults. We’ll review  best practices for selecting subcontractors, essential subcontract terms, and the proper procedure for defaulting and

This is article explores the complex nature of allocating the risks associated with project delays. It was originally published in Schimenti Construction Company’s newsletter and is reprinted with permission.

Retail construction is no stranger to the inherent costs associated with project delays.  Retailers, like all owners, rely upon construction professionals to estimate the duration of a project so that associated hard and soft costs can be quantified and properly budgeted.  The majority of retail construction projects today consist of renovations to an existing store or space.  It is very difficult for designers on such projects to account for and incorporate all existing conditions into their drawings and specifications.  Also, as with any project, it is very difficult at the onset to predict weather, labor conditions, the availability of raw materials and other factors that might have an impact on a project’s duration.  These unknowns often result in unanticipated project delays, acceleration or other impacts.  One District of Columbia judge said that “except in the middle of a battlefield, nowhere must men coordinate the movement of other men and all materials in the midst of such chaos and with such limited certainty of present facts and future consequences as in a huge construction project…”  Blake Cosntr. Co. v. C.J. Coakley Co., 431 A.2d 569, 575 (D.C. Cir. 1981).  But, when the duration of a project extends beyond what was originally contemplated, all of the parties in the construction pyramid suffer unanticipated costs; which can and should have been addressed and allocated within the construction contracts.

There are many different ways to allocate and transfer the risks associated with project delays within a construction contract.  Two of the most common provisions for doing so are “No Damages for Delay” clauses and “Liquidated Damages” provisions.
Continue Reading Allocating The Risks Associated With Project Delays