HomeMy WebLinkAbout20090420 - VI-06
MEMO
To:Honorable Mayor and City Council
From:Tom Montgomery
Date:April 16, 2009
Re:Approve Cal Ruedy Public Works Facility Office Expansion
Subcontractor Bankruptcy Settlement Payment from Escrow Account
Council is requested to authorize payment of $6,679.05 from the Cal Ruedy
Public Works Facility office expansion escrow account plus and additional
$320.95 (for a total of $7,000) to Coleman, Hull and Van Vliet, PLLP Trust
Account as settlement of a bankruptcy claim against the contractor, Construction
Results Corporation, the architect, TKDA, and the City.
B
ACKGROUND
Alliant Mechanical, the mechanical subcontractor on the Cal Ruedy Public Works
Facility office expansion project went bankrupt prior just after completing work
on the project. SPS, a material supplier to Alliant Mechanical was not paid for all
of the materials and equipment delivered to the Public Works facility. SPS filed a
claim against the contractor, Construction Results Corporation, the architect,
TKDA, and the City to recover payment for the delivered materials and
equipment.
Previously, the City had reached an agreement with Construction Results
Corporation to hold their $7,000 final payment in escrow to cover any remaining
punch list items or warranty work that would have been covered by their now
bankrupt subcontractor Alliant Mechanical.
As part of the enclosed settlement agreement with SPS, the City agrees to turn
over the $7,000 escrow account to the creditors and allow the Alliant Mechanical
warranty period to expire on March 15, 2009; approximately four months early.
All punch list items have been completed. As the remaining funds in the escrow
account ($6,679.05) will not cover the $7,000 agreed upon in the settlement
agreement, TKDA will credit the City $320.95 on its final billing for consulting
services for the office expansion project. The City will not be out of pocket for
any of the settlement funds.
From:
Daniel J. Fluegel [dan@fluegel.com]
Sent:
Monday, April 06, 2009 1:40 PM
To:
Dave Osberg; Thomas Montgomery
Attachments:
FW: SPS v. City of Hastings; Hastings Public Works Agreement
Dave & Tom,
I am attaching the typed settlement agreement for the SPS claim. The City is obligated to release
$7,000 to the settlement funds and to the extent the reserve is less than that amount, Dean
Johnson at TKDA agreed to an offset of their remaining invoice in that amount. As you can see,
there was some trouble getting this information emailed to me so I now need to ask that we
expedite the payment. The check should be issued for $7,000 to the Coleman, Hull and Van
Vliet, PLLP Trust Account. Can you let me know how to best obtain that payment? Thanks.
Daniel J. Fluegel
FLUEGEL LAW FIRM P.A.
1303 South Frontage Road, Suite 5
Hastings, MN 55033
Phone: (651) 438-9777
Fax: (651) 438-9775
dan@fluegel.com