July 2, 2008

Big Dig contractor seeks bankruptcy protection

Modern Continental faces federal charges over lying about quality of work

BOSTON

The largest construction contractor on Boston’s beleaguered Big Dig project filed for bankruptcy protection last week, the first business day after federal prosecutors charged the company with lying about its work on the costliest public works project in U.S. construction history.

Modern Continental Co. made a Chapter 11 filing in federal bankruptcy court in Boston. The bankruptcy petition lists debts of US$500 million to US$1 billion owed to more than 200 creditors, and assets of US$100 million to US$500 million.

The filing says Modern Continental’s board voted June 11 to seek protection from creditors.

Federal prosecutors have charged Modern Continental with lying about the quality of its work on two areas of the tunnel system, including a section where a ceiling collapse killed a woman.

Phone messages seeking comment from the Cambridge-based firm were not immediately returned to Associated Press. An attorney, who prepared the filing, Harold Murphy, declined to immediately comment but said the company planned to issue a statement.

The bankruptcy petition says Modern Continental’s largest creditor is URS Corp., a Boston-based firm owned nearly US$9.9 million.

It was not immediately clear how the filing might affect federal prosecutors’ ability to win any financial judgments against the company, should their case succeed. If convicted, the company faces up to U$24.5 million in fines, as well as restitution payments.

A spokeswoman for the U.S. attorney’s office did not immediately return a call seeking comment.

The Big Dig created a series of bridges and tunnels to replace Boston’s old Central Artery. At US$14.8 billion, it is the most expensive highway project in U.S. history.

Modern Continental was the largest construction contractor on the project, which was managed by a consortium, Bechtel/Parsons Brinckerhoff. Modern Continental was not part of a US$458 million settlement the government reached in January with Bechtel/Parsons Brinckerhoff, whose obligations total US$407 million and 24 smaller companies over the cost of tunnel repairs to fix leaks and other problems.

Modern Continental was founded in 1967. Its Web site says the privately held firm is the largest contractor in New England.

Prosecutors on Friday accused the company of knowingly using the wrong epoxy to hold up concrete anchors that failed in the 2006 ceiling collapse in the Interstate 90 Connector Tunnel.

The collapse killed 39-year-old Milena Del Valle, who was crushed when tons concrete dropped on a car driven by her husband.

Associated Press

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