Company owned by US-based Irish developer files for bankruptcy

A multimillion dollar New York building company founded by Irishman Donal O'Sullivan is seeking bankruptcy protection following a €65 million judgment against it.

A Manhattan court recently ruled that Co Kerry-born Mr O'Sullivan's construction company, Navillus, should pay $76 million (€65.3 million) to a number of trade unions following a three-year legal battle.

Navillus has gone back to court to file for Chapter 11 bankruptcy (used in the US to rescue troubled companies) while it appeals the ruling which the company labelled a “mistake” shortly after Judge Colleen McMahon delivered it in September.

Judge McMahon upheld a claim by four construction unions that part of the business, Navillus Tile, invented an “alter-ego” company to avoid collective agreements it had with several New York labour organisations.

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As a result, she ruled that it had to pay $76 million in back pay and benefits to four unions. The judge accused Mr O’Sullivan of perjuring himself in his deposition and during the trial.

The company failed in its bid to have the ruling stayed, pending the appeal’s outcome, obliging it to pay the unions.

As a result it has sought to go into Chapter 11 which will provide it with protection from creditors. “Navillus cannot afford to pay the judgment and maintain its ongoing operations,” Mr O’Sullivan told the court where it filed the proceedings. He pointed out that its assets were mainly ongoing construction jobs.

The businessman told customers and workers this week that as a result, he was left with no alternative but to file for Chapter 11 to protect the company while it proceeded with its appeal.

“It is business as normal,” he said in a letter. He stressed that work will continue on all its projects and that workers, contractors and suppliers will be paid.

Brothers

Mr O'Sullivan founded Navillus with his brothers Leonard and Kevin in 1987, three years after he emigrated to New York from Ballinskelligs, Co Kerry. He is now the sole shareholder in the company which had gross contract revenues last year of $240 million and employs up to 1,600 workers.

Navillus has worked on several high-profile jobs, including One World Trade Center at ground zero, the site of the September 2001 terrorist attacks in New York. Mr O’Sullivan has also pointed out that the company supports organised labour and contributed $172 million to New York union funds over the past five years.

He is well known in Irish circles in the US. He is a strong supporter of the GAA in New York and has contributed to hurricane relief, most recently to storm-hit areas in Florida.

Locals say there is strong support for Mr O’Sullivan and his family in Kerry, where they are involved in several businesses. His brother Kevin owns Cable O’Leary’s pub and restaurant in Ballinskelligs and a construction company.