The Real Deal New York

Indicted Deutsche Bank contractor sues LMDC to recover $20M payment

August 20, 2009 05:48PM
By Adam Pincus

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Exactly two years after a deadly fire broke out at the Deutsche Bank building in Lower Manhattan a demolition contractor charged with manslaughter in the blaze has sued to foreclose on nearly $20 million in mechanic’s liens on the building.

The Bronx-based John Galt Corporation, along with two affiliated firms, filed the foreclosure suit in New York State Supreme Court Tuesday against the property’s owner, the city-state agency Lower Manhattan Development Corporation; the demolition construction manager Bovis Lend Lease LMB and other entities.

Galt is seeking payment of $19.6 million allegedly remaining unpaid from a total of $73.7 million earned from the decontamination and deconstruction work at the bank building at 130 Liberty Street.

Regional Scaffolding & Hoisting, which leased scaffolds and hoists for the project, is also suing LMDC for $1.6 million, and Windham Construction, which rented platforms, claims it is owed $1 million. Both companies are affiliated with Galt, according to prosecutors. 

Attorney Larry Hutcher, partner with law firm Davidoff Malito & Hutcher, who is not involved with the case, said LMDC would not be protected from the foreclosure suits even though it is a quasi-public entity, set up as a joint city-state corporation.

The 15-story building was severely damaged in the 9/11 terrorist attacks, and it was determined it had to be demolished. Just over a year after Galt was hired, a fire on August 18, 2007 killed two firefighters, prompting the Manhattan district attorney to file manslaughter charges in December 2008 against Galt as a company, two employees and an employee of Bovis. Galt was fired from the project a few days after the fire.

The criminal case against Galt and the others is still pending, online court records show.

Galt filed its mechanic’s lien in October 2007, and then filed an extension in October 2008, which was necessary to continue the claim because a mechanic’s lien expires after one year.

A spokesperson for Bovis said it had not yet seen the complaint, and as a matter of policy does not comment on ongoing litigation.

Galt and LMDC did not respond to requests for comment.

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