Time lapse shows installation of FIU bridge and deadly collapse
A judge gave the go-ahead Wednesday to allow Miami-based construction company MCM to restructure its financial obligations under Chapter 11 bankruptcy rules. The firm is being sued for wrongful deaths and personal injuries stemming from the 2018 collapse of an innovative pedestrian bridge at Florida International University in which six people died and eight others were injured. MCM was the bridge builder.
MCM, also known as Magnum Construction Management LLC and previously as Munilla Construction Management, revealed in its bankruptcy filing that even before the pedestrian bridge incident it was in the red, ending 2017 with more than $8 million in losses. It was its second consecutive year of net losses.
Speaking before Judge A. Jay Cristol at the C. Clyde Atkins U.S. Courthouse in downtown Miami Wednesday, MCM attorney Jordi Guso said a series of events had led to MCM’s decision to file for reorganization in order to continue its operations. Along with 18 lawsuits related to the FIU bridge failure, Guso cited the termination of a lucrative Texas project, the firm’s inability to bid on Florida Department of Transportation projects and its limited access to new financing.
Guso said MCM is asking four insurance companies holding policies on MCM’s work to cover at least $42 million and up to $54 million in damages. Attorneys for the victims say they’ve accepted the $54 million cap as part of large settlement negotiations.
“Because they’re going bankrupt, that’s the maximum we can get from MCM,” said Stuart Grossman, one of the victims’ attorneys. He added they continue to seek damages from other parties including FIGG Bridge Group, the pedestrian bridge’s designer. Tallahassee-based FIGG is operating its business normally.
MCM’s insurers’ willingness to pay the bridge victims is the key issue for the families and individuals affected by the collapse, according to Grossman. The insurers include Greenwich Insurance Company, XL Insurance America, Inc., Indian Harbor Insurance Company and The Ohio Casualty Insurance Company. Representatives for the insurers dialed in via telephone to Wednesday’s court proceeding but did not make any comment.
“The bankruptcy process should facilitate rather than interfere” with the victims’ claims, said David Rosendorf, another attorney representing the victims during bankruptcy proceedings. “Nothing about the bankruptcy process should let the insurers off the hook.”
Guso said Wednesday that MCM decided to file for bankruptcy after the Texas Department of Transportation terminated MCM’s contract on a road project near Denton, Texas, about a month ago. MCM is disputing the termination order, which was unrelated to the FIU bridge collapse, Guso said. The project would have generated $35 million for MCM.
In addition, MCM said it is missing out on an estimated $200 million worth of projects with the state of Florida, which has suspended MCM’s bidding license pending the National Transportation Safety Board’s investigation of the March 15, 2018, incident. The NTSB has said that design defects were likely a factor but has not yet issued a final report. MCM and other companies involved in design and construction were fined by the federal Occupational Safety and Health Administration for safety violations.
Adding to MCM’s financial fragility: Two weeks after the March 2018 bridge collapse, MCM’s revolving line of credit of up to $25 million with Bank of America matured; it has not been renewed, Guso said.
MCM’s bankruptcy filing lists nearly $100 million in assets and about $47 million in liabilities. The company currently has 31 active projects it says it is obligated to complete, including four with Miami-Dade Public Schools and one with Miami-Dade County. The company said it is able to operate thanks to loans totaling more than $22 million from two lenders: Travelers and Berkshire Hathaway Specialty Insurance Company.
Jorge Munilla, president of MCM, said after Wednesday’s proceeding that he was prevented from discussing details because of pending lawsuits and a gag order stemming from the NTSB investigation. Multiple members of the Munilla family, which runs MCM, attended Wednesday’s proceeding.
“It’s been a difficult time for the [Munilla] family,” he said. “Our thoughts and prayers remain with the victims.”