American Architectural Objects to General Contractor's Motion for Expedited Decision on World Trade Center Contract
July 25, 2012

by Erica Terrini, eterrini@glass.com

As American Architectural Inc. (AAI) moves onward through its Chapter 11 bankruptcy case, the company has objected to New York-based Skanska USA's motion to expedite the court's decision to order AAI to resume or cease its interior glass works and interior glass railing subcontracting work for the World Trade Center PATH Hall, which is part of the Center's Transportation Hub.

According to AAI's objection to Skanska's request, if the company was forced to make a decision regarding the subcontracting work it could potentially risk losing "profitable projects and possibly an opportunity to reorganize. Conversely, if [AAI] assumes either or both of the contracts without having time to adequately evaluate the costs and revenues attendant to same, [AAI's] Chapter 11 process might be impaired or even halted if the burdens attendant to such contracts saddle the estates with administrative liabilities non-commensurate with their respective benefits."

AAI also claims in its objection that the request comes too early on in its Chapter 11 bankruptcy case for the company to commit to "a decision of this magnitude without allowing them time to adequately analyze all of the economic and practical considerations that go into an informed assumption or rejection decision. Given the nature of [AAI's] business, it is critical that these agreements remain in place for the time being and that the respective counter-parties timely honor all of their obligations under such agreements. It would clearly be pre-mature, at this stage of this brand new Chapter 11 case, to force [AAI] into a hasty decision that could squander potential value for the benefit of all creditors."

According to Skanska's motion to expedite, the Port Authority of New York and New Jersey granted the company the PATH Hall contract in 2010 and had subcontracted AAI at $6.2 million for projects including glass railings and other glazing items. However, the general contractor claims that before AAI filed for Chapter 11 bankruptcy in June, it had paid the company $696,485 for work completed in the entire month of May.

"Skanska is aware of two vendors that have ceased work on the PATH Hall project because of AAI's failure to pay those vendors," Skanska wrote in its motion to expedite. "Unreasonably prolonging the time period in which AAI makes a decision leaves Skanska in limbo (as well as the other trades) as to how the completion of the PATH Hall project will be met."

At press time, the court had not yet ruled on the motion. Stay tuned to www.USGNN.com™ for further updates as they become available.

This story is an original story by USGlass magazine/USGNN™. Subscribe to USGlass magazine.
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