Court Approves AAI/Skanska Agreement on World
Trade Center Contract
August 9, 2012
by Penny Stacey, email@example.com
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania,
where American Architectural Inc.'s (AAI) Chapter 11 case currently
is under review, has approved a stipulation agreement between the
company and a general contractor with whom the company has been
working on the interior glass work and interior glass railing for
the World Trade Center's PATH Hall. The general contractor, Skanska
motioned as part of the case for the court to order AAI to resume
or reject the subcontract in an expedited manner, and the companies
had recently advised the court they'd attempted to reach an
agreement on the matter.
Under the terms of the agreement, a temporary joint check payment
procedure has been established to provide for payment by Skanska
to AAIA to "certain trust fund beneficiaries for work performed
on the project during the interim period." The agreement defines
"trust fund beneficiaries" as those who have completed
work as subcontractors for AAI and/or have supplied materials for
Meanwhile, AAI has a deadline of September 14 to file a motion to
assume or reject the subcontract, under the terms of the agreement.
According to the agreement, if AAI rejects the subcontractor, the
company will be required to provide "all materials and drawings
(in CAD and PDF format) in [its] possession for the project [to
Skanska] and assign any and all subcontracts and purchase orders
as directed by Skanska to [ensure] a smooth and orderly transition
to Skanska or a replacement contractor." In addition, the parties
have agreed to resolve any amounts Skanska owed to AAI (as of September
14) within 30 days.
The companies further propose that through the period of September
14, Skanska will issue joint checks to the trust fund beneficiaries
on the project and direct checks to the debtor for self-performed
work all within a capped amount of $663,975 for work performed during
the interim period.
In its original motion to expedite the court's consideration of
the matter, Skanska had alleged that it had paid AAI $696,485 for
work completed on the project during the month of May, and that,
at the time of the motion, at least two vendors had ceased work
on the project due to AAI's alleged failure to pay them.
for bankruptcy in mid-June.