The Real Deal New York

HRH Construction fighting bankruptcy, fraud allegations

May 23, 2011 11:15AM

Once among the top construction firms in New York City, HRH Construction, the 86-year-old company that built Citigroup’s Midtown headquarters and many of Donald Trump’s metro-area projects, is now mired in bankruptcy court and fighting off allegations of fraud. Crain’s reported that HRH’s downfall began in the early 2000s during the construction of 2 Broadway, a building owned by the Metropolitan Transportation Authority. The project went $300 million over budget, thanks in part to HRH overbilling the construction costs, according to arbitrators who ordered the firm to repay $6.5 million in 2007. But HRH has avoided compensating the MTA since filing for bankruptcy in 2009. Around the same time, allegations arose that HRH was double-breasting — or setting up a nonunion operation to avoid labor contracts. The operation, called Leviathan Construction Management Services, had connections with HRH CEO Brad Singer’s wife, and had its office expenses and health insurance premiums paid for by HRH, according to court documents. HRH even guaranteed Leviathan’s work, leading unions to believe that HRH ran money through Leviathan to keep it from bankruptcy creditors. When a bankruptcy trustee entered HRH’s White Plain’s offices last month to inspect the company’s records, Crain’s said she found computers, recent work and executive files had vanished. In addition, electronic key card records show that the entrants used keys belonging to the firm’s counsel to enter the building, according to Crain’s. [Crain's]

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