Court Approves AAI/Skanska Agreement on World Trade Center Contract
August 9, 2012

by Penny Stacey,

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 USA, had 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 the project.

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.

AAI filed for bankruptcy in mid-June.

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