I have an problem with a munical project in Texas. The general contractor has big financial problems. We have filed with the bond company but our claim was rejected because it was filed late. We have only provided approximately 50% of the material required. The end customer wants us to provide the remaining materials. Somehow the contractor is still involved with the project and is assisting the city with the transition. I need advise on next steps, which I expect requires filing suit.
These types of disputes are complex and the options for resolving the claim usually differ from project to project. If the owner is looking to establish a direct relationship with you, there may be an opportunity to negotiate a resolution to the outstanding balance. You should retain an experienced construction lawyer to evaluate your claim.
Hello,
Let's work backwards. You have two end possibilities here.
1. A payout by the bond.
2. A payout by the contractor.
Because it is a municipal project, you do not have any lien rights. Because you do not have lien rights and were late to the bond claim, that leaves the contractor.
His financial problems are only partially your problem. You have obvious claims for breach of contract, promissory estoppel, etc. but you would have to sue him to get there. And then you would have to attempt to collect as he probably files bankruptcy. You can follow him into bankruptcy. It is not the easiest of process but we have done it before.
However, if you do not want to sue him (completely understandable), you would need to start with a conversation and explore other routes. One route would be to get him to sign an agreement for a payment that he personally guarantees. What you're trying to get at is an agreement for payment that would survive bankruptcy, however that may look.
In short, see if you can work something out because this can go from bad to worse.
E. Aaron Cartwright III
214.789.1354
Aaron@EACLawyer.com