We helped the owners of a design-build firm to navigate a dispute with its construction subsidiary, which had experienced significant losses, client attrition, and employee turnover. The subsidiary’s mismanagement, including poor budgeting and inadequate pre-construction studies, had resulted in cost overruns, liens, litigation, and multi-million dollar losses. Access to critical project information was hindered when our client was locked out of the subsidiary’s systems. Working with the design-build firm’s corporate and employment counsel, we advised on potential solutions, including the subsidiary’s sale to or purchase by the design-builder, or leadership changes. All options hinged on the status of the subsidiary’s ongoing projects, so we provided construction law advice to assess and mitigate risk. This involved verifying the absence of pending claims, liens, or litigation against the subsidiary, securing access to project data and financial records, and confirming the accuracy of the subsidiary’s representations regarding the projects’ status. Our due diligence and guidance let the parent company make informed decisions about the subsidiary’s future.
