Elkhorn Contractor Defaults On Madison Area Interchange Project

According to Wisconsin DOT project engineer Adam Kopp, Mann Brothers, Inc. of Elkhorn stopped work for the winter break in mid December on the $6 million Fitchburg US 14 interchange project, and never came back to work when the spring highway building season opened. Heavy equipment on the job site is neatly lined up in rows, and the project subcontractors and material suppliers have not been paid. Hudson Insurance, the performance and payment bond surety on the project, is in negotiations with WISDOT over payment to subs and suppliers, and the hiring of a general contractor to complete the project.

Mann is also in default on county road projects on Routes A, J and ES in Walworth County. Walworth County Purchasing Manager Peggy Watson said her projects are stalled and the County is “having the bond company work through the issues.” Neither Walworth County nor WISDOT has yet determined whether to have Mann continue as general with financing from the bonding company, or to mobilize a replacement general contractor at the bonding company’s expense.

Mann Brothers was founded in Elkhorn in 1920 when Lawrence Mann and his sons trapped and sold 85 wild mink, and used the proceeds as down payments on a Caterpillar bulldozer and a ton and a half dump truck. In 1932 ownership passed to the second generation, and then to the third generation in 1982 under the leadership of Richard Mann. Fourth generation owner David Mann has overseen rapid expansion of the company, apparently stretching corporate finances to the point where the downturn in the construction economy has taken its toll on the company’s ability to pay subs and suppliers.

Seven Bridge Projects Halted By TriWest/Concreate Receivership

Pulling the plug on months of failed workout negotiations, Bank of Nova Scotia has forced Concreate USL, Ltd. and Concreate’s new owner TriWest Construction into receivership in Ontario Superior Court under the administration of accounting firm Grant Thornton. The receivership proceedings involve a steel fabricator owed $4.75 million on the Strandherd-Armstrong Bridge in Ottawa, bonded by surety Guarantee Company of North America, as well as numerous projects bonded by Travelers.

Work on the Strandherd-Armstrong bridge and six bridges spanning the Queen Elizabeth Waterway has been stalled by the court proceedings. The fabricator on the Strandherd-Armstrong bridge has refused to ship any more steel to the site until it gets paid.

Guarantee Company of North America holds bonds for over $23 million on Concreate/TriWest projects, and Travelers holds more than $52 million in bonds on the stalled construction projects. Bank of Nova Scotia lent $34 million to Concreate/Tri West in February, 2011 on the strength of a capital infusion by TriWest when it bought Concreate in January of the same year.  According to court filings by Travelers on April 10, 2012, Travelers claims the sale of Concreate to TriWest was done in violation of Concreate’s indemnity agreements with Travelers.

Concreate was founded in the 1970’s, and moved to Ontario in 1983. During the last 15 years Concreate has expanded its operations from shotcrete bridge repairs to include new bridge construction, post tension water reservoirs, skateboard parks, and bobsled and luge tracks. While the January 2011 sale to TriWest and the February, 2011 Bank of Nova Scotia loan were supposed to improve Concreate’s financial strength, receivership filings indicate TriWest took $15.4 million in writedowns on construction contracts after the bank loan was made, causing Bank of Nova Scotia to call the loan, and initiate the receivership when Concreate and TriWest could not make the payment.

At this juncture, it seems unlikely that Travelers, Bank of Nova Scotia, Guarantee Company of North America and the unpaid subs and suppliers will sort out their differences in time for any of the seven stalled bridge projects to meet their current contractual completion dates.