BID TO SAVE KERRY-OWNED BUILDING FIRM IN USA
KERRY-OWNED BUILDING FIRM SEEKS PROTECTION AFTER $76M U.S. FINE
MAJOR New York building firm Navillus, which is owned by a Kerry family, has applied to the US courts for bankruptcy protection in the wake of a record $76 million judgement against it.
Last month at Manhattan Federal Court, Navillus, which was founded by Ballinskelligs man Donal O’Sullivan in the mid 1980s, was hit with the $76 million fine after it was found guilty of inventing a companion company to avoid paying union wages and benefit payments.
The fine was one of the biggest ever handed down in the US in a case of this kind.
Navillus has now returned to court to file for Chapter 11 bankruptcy – similar to the Irish examinership process – which is typically used in the US to rescue troubled companies.
The Kerry-owned company is seeking Chapter 11 protection as it appeals a judicial decision not to permit a stay on the payment of the fine until an appeal of the judgement has been concluded.
Navillus has opted to seek Chapter 11 protection which, if granted, will provide the company with protection for its creditors and allow it time to restructure its debts.
Chapter 11 – the most complex and expensive form of bankruptcy that can be sought in the US – is usually filed by firms that require time to restructure their debts. It gives the debtor a fresh start, provided they fulfil all obligations agreed under a plan of reorganisation.
Numerous large U.S. companies – such as General Motors and United Airlines – have previously filed for Chapter 11 and subsequently managed to stayed afloat.
At the hearing to file the bankruptcy proceeding, Donal O’Sullivan said that, at this time, Navillus cannot afford to pay the fine and maintain its ongoing operations as its assets are mainly ongoing construction projects.
In a letter to employees and customers Mr O’Sullivan insisted that “it is business as usual” at the company, that work on all projects will continue and that all staff, contractors and suppliers will be paid in full.
Founded by Donal O’Sullivan and his brothers Leonard and Kevin in 1987, Navillus has grown to become one of the largest construction companies in New York and has been involved in major projects including construction of the new One World Trade Centre tower on the site of the 9/11 terror attacks.
Donal O’Sullivan – who retains close links with Kerry– is now the sole shareholder in the company which employs around 1,600 people.