Surety Practice | Case Study
HVAC Contractor Rebounds to Enhance Surety Capacity
Successful profitable HVAC contractor ran into one bad job. The General Contractor led them on with promises of change orders causing a $2.5million overrun. After spending $1million in legal fees in attempt to regain these loses, the company lacked additional resources to continue the pursuit of legal remedy. Their net worth and working capital were depleted and their Surety withdrew their support.
Working with the HVAC contractor’s CFO we prepared cash flow projections based on their backlog and suggested certain balance sheet restructuring. By leveraging our relationship and presenting the contractor in the best light possible we were able to place them with another surety. This allowed the contractor to regain capital lost capital and eventually earning back it’s full surety credit capacity.
The ability to continue bonded work allowed the company to reestablish its profitability and capital position. Working with a proactive surety advisor, who understands what surety underwriters are looking for in a principle, is crucial in today’s construction climate. BKS’ surety practice partners with our clients to position them to maximize their surety relationships.