In an effort to repel an onslaught of lawsuits from suppliers and subcontractors, Equidon Contractors plans to file for voluntary liquidation under Chapter 7 of the federal bankruptcy laws next week, possibly Monday, an attorney for the company said Friday.
Irvine-based Equidon Contractors originally was the construction arm of Equidon Cos., which developed about $250 million worth of office and research and development buildings in Southern California before it filed for bankruptcy liquidation last November.
In October, when the parent company publicly acknowledged that it had closed shop, a spokesman for Equidon Cos. said it was withdrawing from further office development in response to Southern California's glut of new office space. Equidon Cos. also attempted to sell Equidon Contractors, but the deal fell through.
Meanwhile, Equidon Contractors attempted to reorganize its debts and remain in business but was unable to obtain a necessary capital infusion from its lenders, Equidon Contractors' attorney, Marc Winthrop, said Friday.
Winthrop said Equidon Contractors has been unable to pay its bills and that "15 to 20 lawsuits and liens" have been filed against the company in the past three months. The latest suit was filed last Wednesday by Kline Development Partnership, which is claiming $44,771 in actual debt and $1 million in punitive damages.
"They (the lawsuits) will all be stayed when we file a Chapter 7" petition, Winthrop said.
Winthrop said he did not know the total amount of the claims from the company's estimated 6,000 creditors. He said the Newport Beach accounting firm of Coleman & Grant has been hired to compile schedules of claims and assets that ultimately will be filed with the U.S. Bankruptcy Court in Santa Ana.
Equidon Contractors delayed filing for bankruptcy, Winthrop said, in order to wind up about 17 projects it had been building for various property owners and developers that otherwise might be delayed by the court proceedings.
He said the company has canceled contracts to build the Jamboree Center office complex in Irvine for the Irvine Co. and the Atrium office building being developed in Irvine by the French & McKenna Co.
Typically, Winthrop said, where Equidon Contractors has canceled its contracts, its construction workers have remained on the job as employees of the property owner.