Miami-Dade County

Bankruptcy filings show contractor MCM racing to survive after FIU bridge collapse

Facing lawsuits from a collapsed bridge it helped build, Munilla Construction Management is asking a bankruptcy judge to protect it from creditors while borrowing millions of dollars to make payroll, continue building and not shut its doors after decades as one of South Florida’s largest government contractors.

Bankruptcy filings released Saturday describe a once-thriving company warning of insolvency as it tries to survive nearly one year after a pedestrian bridge it was building for Florida International University collapsed and killed six people. Lawsuits filed on behalf of survivors and victims’ families are listed on MCM’s roster of liabilities, but with potential costs marked as unknown.

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An aerial view of the collapsed FIU bridge that left six people dead on March 15, 2018. Pedro Portal pportal@MiamiHerald.com

During a Chapter 11 reorganization, MCM can try to negotiate lower payouts to creditors under the supervision of a federal bankruptcy judge. While the filings warn of a cash shortfall without new financing, the company has negotiated an $18 million loan from a group that includes Berkshire Hathaway as part of the bankruptcy process. The company says that will give it the breathing room needed to continue operating and finish existing projects. A judge needs to approve the loan.

The company said in a press release Friday night it wants to handle claims from the March 15, 2018, bridge collapse during the bankruptcy proceedings, too, but lawyers in those suits can fight to keep the cases out of the Chapter 11 process. MCM is counting on its insurance carrier to pay off any damages from the bridge collapse.

The 1,295-page bankruptcy filing in the U.S. Southern District Court in Miami describes a company in retreat. MCM used to describe a 1,000-person workforce, but the filings say the company’s payroll has 287 people on it.

MCM also is retreating from the two places where it has offices beyond South Miami. In a December letter to MCM’s chief financial officer, a financial advisor hired to sort out the company’s cash needs during bankruptcy noted “MCM is seeking to orderly exit its Panama operations and reduce its Texas presence.” MCM reported about $192,000 in cash at the time of the bankruptcy filing Friday night, with a payroll that costs roughly $425,000 a week.

MCM lawyers wrote in a bankruptcy filing that if a judge did not approve an immediate loan, the company “will be unable to continue to operate, and will likely be forced to liquidate.”

Federal investigators have identified design flaws in the FIU bridge over Southwest Eighth Street. The structure was designed by MCM’s joint-venture partner, FIGG Bridge Group. The bankruptcy filings show FIGG and MCM are in the midst of their own legal action over the bridge collapse.

MCM lists as an asset a breach of contract claim against FIGG relating to the FIU pedestrian bridge. FIGG is listed along with subcontractors on the job and “various insurance carriers,” but no details are offered. A separate entry lists an “errors and omissions” claim against FIGG over the FIU bridge project.

On Saturday, MCM disputed the two partners were in a legal fight. “There are no disputes, legal or otherwise, between MCM and FIGG,” MCM President Jorge Munilla said in a statement.

In a question-and-answer posting on its website, MCM said it has secured about $18 million in loans to pay bills during bankruptcy. The posting said MCM was unable to tap into normal lending markets after the bridge collapse, while revenue dried up as MCM was unable to win new projects.

Even so, MCM is trying to finish projects it signed before the bridge collapse. “Yes, our doors are open,” the posting said, “and it is business as usual.”

A spokesman released a statement from Jorge Munilla Saturday night stating: “MCM will finish all of its projects signed before the bridge collapse.”

Since 2014, MCM has won more than $69 million worth of construction work with Miami-Dade County, where the reliable donor to local races has won contracts for projects at PortMiami and Miami International Airport. But it hasn’t won a county contract since the bridge failure.

It bid on a county library project in Hialeah Gardens last September, but withdrew it months later. In 2017, Miami-Dade’s mayor and commissioners were helping MCM try to win an $800 million state contract to build Miami’s new “signature bridge” over I-395. MCM and FIGG, its partner in that project too, abandoned the effort after the FIU collapse.

The company was founded by the sons of a top bridge builder in pre-Castro Cuba. The Munilla brothers came to the United States under the Pedro Pan program for unaccompanied children, and they landed in an Ohio orphanage in a trip that began days before the Bay of Pigs invasion, according to the company’s website.

Fernando Munilla eventually joined his children in the United States, setting up a construction firm in Miami. That company led to the founding of MCM in the 1980s, and the firm succeeded in major government contracts in Miami and beyond.

In a brief interview in January, MCM partner Pedro Munilla was asked to describe the financial state of MCM. “We’re devastated,” he said. “We haven’t been able to bid for nine months.”

Saturday night, a company spokesman said Munilla was referring to the emotional devastation suffered by the partners and the company after the bridge collapse.

The MCM bankruptcy filing lists nearly $100 million in assets and about $47 million in liabilities. But most of the company’s worth is tied up in things it would need to sell, like dump trucks, and money it hopes to collect, like $7.2 million it says the U.S. Navy still owes the company for building school at the base in in Guantánamo, Cuba under a federal contract worth about $60 million.

Doug Hanks covers Miami-Dade government for the Herald. He’s worked at the paper for nearly 20 years, covering real estate, tourism and the economy before joining the Metro desk in 2014.
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