Plaintiffs v. Major Utility
Sedgwick has begun the process of negotiating the resolution of more than 100 claims filed against our client, a major utility, by more than 40 subcontractors and material suppliers that were not paid for the work they performed on number of our client’s recent construction projects in California. Our client had hired a general contractor to manage and oversee these projects and, despite the fact that our client paid the general contractor in full for its work on the projects, the general contractor absconded with the payments and failed to pass down the portions owing to its subcontractors and suppliers. The general contractor's payment breaches resulted in a wave of mechanic's liens and stop notices, which culminated in multiple lawsuits filed against the general contractor and our client. The total amount demanded by the subcontractors and suppliers exceeds $2.5 million. In the past two months, Sedgwick has successfully negotiated the resolution of the first 12 cases on terms that are very favorable to our client. Sedgwick expects to resolve the remaining 20 claims on similarly favorable terms. As part of the settlements, our client is taking an assignment of the subcontractors' and suppliers' claims against the general contractor, and Sedgwick intends to vigorously pursue these assigned claims.