Contractor Seeks Rejection of Trainor Construction Subcontract for Arizona Project
July 9, 2012

A St. Louis-based contractor has filed a motion in the bankruptcy case of Trainor Glass in an effort to move forward with the rejection of a subcontract awarded to Trainor for a previously started project in Peridot, Ariz. Philadelphia-based Westchester Fire Insurance Co., which had issued subcontract performance and payment bonds on behalf of Trainor, co-filed the motion with McCarthy Building Companies Inc.

According to the motion, Trainor had been contracted to complete glass and glazing work for McCarthy's San Carlos Apache Rural Healthcare Center project, but had "ceased all work on the project and repudiated its obligations to perform the work required under the terms of the subcontract" in February 2012, prior to its Chapter 11 filing in March 2012.

Prior to the start of the work, Trainor Glass had obtained payment and performance bonds under the subcontract "to perform the work required … and to pay for labor and materials required," according to the motion.

McCarthy alleges that while it did not give formal notice of the termination of the subcontract prior to the petition date, Trainor Glass officials "have advised Westchester that [it] has no intention of assuming or performing the subcontract and made statements at the meeting of creditors that [it] has no intention [of] continuing any work on any of its remaining projects."

The companies together hope to formally terminate the subcontract "so that Westchester, as surety under the bonds, can make arrangements and agreements with McCarthy for the completion of the work required under the subcontract."

The companies further allege that Trainor's "failure to perform its work under the subcontract has caused delays in the work on the project and increased costs to McCarthy and Westchester."

The court has not yet ruled on the motion.