“A North Carolina contractor lost a big lawsuit, ran into financial trouble and then stonewalled surety Liberty Mutual Insurance Co. for a short while before filing for protection from its creditors in U.S. bankruptcy court.
That is the picture that emerges of Intercoastal Contracting Inc., a Castle Hayne, N.C.-based heavy construction general contractor that started as a diving company in 1987, from a lawsuit against it in August by Liberty Mutual. The contractor’s downfall is also recorded in other legal documents and lawsuits.
During a year when contractor failures have spiked, sureties are often forced to step in to finish projects while their contractor clients are in financial free fall. Because the surety almost always has the right under its agreement with the contractor to be compensated in full for its losses, the relationship can become strained. And when all the complexities of a bankruptcy are factored into the equation, the projects may languish.”