The bankruptcy filing of a Durham construction company has left a runway project at Smith Reynolds Airport and an extension of Clemmonsville Road in limbo for now.
Mainline Contracting Inc. filed for Chapter 11 bankruptcy protection on Tuesday, meaning that the company can stay in business but must reorganize to satisfy creditors and claims for payment.
Airport and city officials say they don't know how long it will take for the two big Mainline projects here to get going again.
"The work stopped, it didn't get restarted, and Mainline declared bankruptcy," said Tom McKim, the chairman of the Airport Commission of Forsyth County, which operates Smith Reynolds Airport.
Mainline was about six weeks away from completing the runway project when a subcontractor stopped hauling dirt to the site near the end of August and work practically ceased, officials said.
Mainline's $5.8 million contract at Smith Reynolds involves creating an area at the south end of the longest runway that is designed to safely stop planes that overshoot the runway or come up short on a landing.
Officials with Mainline could not be reached, but the company said in court documents that it has "significant accounts receivable and expects to receive significant funds in the near future. Mainline is continuing to operate, expects to complete all pending jobs, and will continue to seek and accept new jobs."
Greg Turner, Winston-Salem's assistant city manager, said that Mainline has a $4 million contract to extend Clemmonsville Road from Old Salisbury Road to the Peters Creek Parkway area near Wal-Mart. The project has a Nov. 4 completion date.
"It doesn't automatically mean (Mainline) will stop work," Turner said. "But I have directed engineering to set up a meeting to set up a schedule for the project during bankruptcy."
For both projects, Mainline had been required to post a performance bond to make sure that the work was finished.
Turner said that if Mainline doesn't respond to the city's request for a meeting or can't finish the project, the bonding company would bring in another company to do the work.
That's an option for the airport commission as well, McKim said.
The company said in its court filing that it had $23 million in assets, including about $450,000 in bank accounts and $14.5 million in money it is owed. Mainline's assets also include vehicles and equipment worth about $8 million.
The company's liabilities totaled $33.3 million, including $21.4 million owed to secured creditors -- banks, mostly, and equipment financing companies. There are also 77 unsecured claims totaling $11.9 million.
The unsecured creditors include subcontractors who hauled dirt for the airport project and say they were underpaid. RAL Grading and Demolition of Raleigh, which was the first hauler on the job, says it is owed $554,000. The second subcontractor, Stewart Hauling and Backhoe of Belews Creek, says it is owed about $345,000. Cat-A-Hula, the third hauling subcontractor, says it is owed $580,000.
A number of other haulers that worked under RAL and Stewart have said they were not paid. Many -- but not all -- of the haulers claiming payment for airport work are companies owned by minorities or women.
The Federal Aviation Administration is investigating RAL's claim of nonpayment.
John Sharpe, the director for operations of Cat-A-Hula, said that his company would survive but that many smaller ones might not.
"It puts you in a hell of a bind," Sharpe said.
"We have creditors calling every day, but until you get money flowing again there is nothing you can tell them."
wyoung@wsjournal.com 727-7369
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