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Roundup: CraneWorks 401k, Allegiance Tax Lien
July 25, 2013
CraneWorks Meager 401k Contributions Continue
As we reported last year, two years after suspending contributions to its 401k plan, CraneWorks reinstated its partial – and meager – matching contribution in 2011. The US Department of Labor has now released the 2012 annual report, known as Form 5500, for the CraneWorks 401k. According to the report, in 2012 CraneWorks contributed just $50,021 to 80 plan participants, which works out to just $626 per participant. The total balance of participant loans increased from $88,768 in 2011 to $97,493 in 2012.
Please visit our CraneWorks – For Workers page for further details and documents.
Allegiance Hit with Tax Lien in Alabama
The Alabama Department of Revenue has filed a $6,081.95 tax lien against Allegiance Crane. According to the filing, the lien is for an unpaid “business privilege tax,” which is an annual tax paid by companies registered to do business in Alabama. The lien remains pending at this time.
See our Allegiance Crane – Public Records page for details and documents from the company’s liens, lawsuits and property records.
Allegiance Sued Over Alleged Sexual Harassment
July 23, 2013
A former Allegiance Crane & Equipment employee has filed a lawsuit in federal court in Houston alleging she was subjected to sexual harassment, and that Allegiance retaliated by terminating her after she complained to Human Resources about the sexual harassment.
In the complaint (to be posted in a future update), the plaintiff cites many specific instances of sexual harassment during her time working as a Texas Department of Transportation Compliance Officer at Allegiance. She claims that Allegiance’s general manager, Ray Bellamy, made degrading and derogatory comments toward her and that she was subject to sexual jokes by Bellamy and another manager on a daily basis. She states that she requested the jokes stop several times but that they did not. She argues that there was “An atmosphere of offensive sexual language was prevalent among the senior male employees at the office” and also claims that on one occasion another employee came into her office and exposed himself to her while using graphic language. The complaint alleges that Allegiance Crane President, James Robertson, also got in on the harassment. It states that Robertson subjected her to sexual language on multiple occasions.
In addition, the plaintiff alleges that Bellamy insulted her physical appearance several times, and that Bellamy claimed the plaintiff did not know what she was doing on her job because she was a woman.
The plaintiff claims that she reported the alleged sexual harassment on several occasions to Human Resources with no results, and that she was involuntary terminated after she complained. The plaintiff seeks back pay and unspecified damages. Allegiance has not yet answered the complaint and the case remains pending.
Please visit our Allegiance Public Records page for more details, and copies of major filings for this and other Allegiance Crane cases.
Allegiance Operator Brags About Working Without a Hangover
June 28, 2013
We’ve all heard countless stories about people posting stupid things on Facebook – and people continue to post stupid things on Facebook.
With the full understanding that this may have just been a joke, here’s something stupid an Allegiance operator recently posted on his Facebook page:
The jobsite in the photo is the Oceana condo in Key Biscayne, where this operator is reportedly currently working. The general contractor on this project is Coastal Construction, who was previously profiled on our site as a customer of General Crane.
We are withholding this individual’s name, but we do want to point out that this is the same Allegiance crane operator featured in the April 5, 2013 “Allegiance Crane Follies in Miami Gardens” update below. In that situation, he reportedly showed up for work late, and then made mistakes which led to his crane cable striking a power line.
Bank Files Case against Allegiance for $28,935.74
June 27, 2013
On June 20, 2013, Third Coast Bank filed a case against Allegiance Crane & Equipment in Harris County Texas. In the complaint, the plaintiff alleges that Allegiance breached a contract it had with Fuel Streamers Inc, a supplier of petroleum and renewable fuels.
According to the complaint, Fuel Streamers is the obligor of a past due $4,000,000 promissory note with Third Coast, making Third Coast the assignee of all collection rights concerning Fuel Streamers' accounts receivable. This right allows Third Coast to bring this suit against Allegiance for debts they allege Allegiance owes Fuel Streamers.
Third Coast claims that Allegiance and Fuel Streamers entered into a contract though which Fuel Streamers would supply petroleum or renewable fuels to Allegiance. They argue that Fuel Streamers fully performed its contractual obligations by delivering the petroleum or renewable fuels and that Allegiance breached this contract by failing to make a payment for the services received. Third Coast also argues that it sent notice to Allegiance concerning their assumption of the collection of Fuel Streamers receivables, and Allegiance failed to settle the account. Third Coast is requesting that Allegiance pay the $28,935.74 owed on the account, plus interest, court costs and attorney’s fees. Allegiance has not yet answered the complaint and the case remains pending.
Please visit our Allegiance Public Records page for more details, and copies of major filings for this and other Allegiance Crane cases.
Tax Liens for Beyel, Sun Crane (Lewis)
June 19, 2013
The Florida Department of Revenue recently issued two tax liens against Beyel Brothers.
The first of these liens (also known as tax warrants), for $4,015.78, concerns delinquent sales and use taxes. The second, issued for $382.18, concerns delinquent “government leasehold taxes” and lists the address of Beyel’s maritime yard in Merritt Island, FL. Both delinquent accounts remain unpaid at this time.
Since the five Beyel brothers took over the company from their father in 1989, they have racked up around $400,000 in state and federal tax liens (see our Beyel Finance page for a full history). This amount does not include Beyel’s long record of local property tax delinquencies, which will be the subject of a future update.
Sun Crane – Kyle Lewis
Although Kyle Lewis’ latest crane company, Sun Crane & Hoist, has only been operating in the US for a short time (see the March 8 and 11 updates below), Sun has already managed to get hit with a tax lien. The state of Texas has issued a $7,676.19 sales, excise and use tax lien against Sun Crane. The lien, recorded in Tarrant County, TX, remains pending at this time.
Lawsuit Filed Over Birmingham Airport Fatality
June 6, 2013
As reported in the April 10, 2013 update below, a 10-year-old boy was killed when a flight display board fell at Birmingham Shuttlesworth International Airport, striking the boy and several of his family members. The airport had just celebrated the opening of its new main terminal when the tragedy occurred.
Yesterday the boy’s family filed a lawsuit against the contractors who designed, constructed and installed the display board. The Complaint names several defendants, including project manager A.G. Gaston Co.; construction managers Brasfield & Gorrie and BLOC Global; architects KPS Group and KHAFRA; and the sign manufacturer Fish Construction.
In the suit, styled Bresette v. Brasfield & Gorrie et. al. and filed in Jefferson County, Alabama Circuit Court, the plaintiffs accuse the contractors of negligence and causing the boy’s wrongful death.
According to the complaint, "All Defendants knew or should have known that the flawed design, the improper modifications, and the failure to secure or anchor the free standing MUFIDS [the flight displays] would result in instability and foreseeable risk of fatal danger to the general public."
News accounts report that the boy’s 8-year-old brother and 5-year-old sister were also injured, and his mother broke her pelvis and both ankles. The family was on a layover in Birmingham, on their way home to Kansas City after a spring break trip in Florida.
None of the defendants have responded to the filing yet. We will provide updates on this case as it continues.
This accident and its aftermath have been covered extensively in the media, including this special report by the Birmingham News on the design, manufacture and installation of the flight display board.
Allegiance Crane: Public Records
May 29, 2013
Port-a-John Accident Update
As reported in previous updates, Allegiance Crane & Equipment was involved in an accident at the Bellini Williams Island construction site in Aventura, FL in April 2012. An Allegiance crane was lowering "Port-a-Johns" from the upper floors of the structure when one broke loose and struck a worker on the ground. The injured worker, a leased employee of Commercial Forming Corp. South, filed a lawsuit against Allegiance, the crane operator and project owner Bellini WI LLC. The plaintiff claims that negligence on the part of Allegiance caused him "to sustain significant personal injuries." Specifically, the plaintiff claims that that the defendant "negligently lowered/dropped a 400 pound 'Port-a-John' on the Plaintiff."
Since we last updated this lawsuit (see February 4, 2013 update below), there have been several new filings in the case:
- The Plaintiff filed his Unverified Answers to defendant Bellini WI LLC’s First Interrogatories. The Plaintiff claims he suffered several broken bones, from his ankle to his ribs, among other injuries.
- On April 23 2013, a Default was entered against the Third-Party Defendant, Commercial Forming for their failure to serve or file as required by law.
- On April 29 2013, Torres issued a Request to Sever the Third Party Complaints & Counterclaim on the grounds that the claims are solely for indemnity and contribution. He argues that this will only complicate the personal injury action and confuse a jury. The filing claims that the trial will “become three trials within one” and requests that the actions be severed and brought up as separate actions.
New Slip-and-Fall Lawsuit Filed
In what appears to be a classic “slip and fall” case the plaintiff, Benkamin Schwed, alleges that he tripped and fell on a barricade near an Allegiance jobsite on Collins Avenue in Miami Beach. The complaint states that Allegiance had a duty to the plaintiff to maintain safe conditions for pedestrians and failed to do so resulting in the hazardous conditions that cased the plaintiff’s bodily injury. Schwed claims that as a result of the fall he suffered “pain and suffering, disability, disfigurement, mental anguish, loss of capacity for the enjoyment of life, expense of hospitalization, medical and nursing care, treatment and attendance, and/or aggravation of a previously existing condition.” Schwed demands judgment for all damages against Allegiance Crane. Allegiance has not yet filed an answer. The case remains pending. Please visit our Allegiance Public Records page for more details, and copies of major filings for these and other Allegiance Crane cases.
Beyel Customer Pages Updated
May 23, 2013
As we have previously reported, several Beyel Brothers customers are part of the “race to the bottom” that enables Beyel Brothers and other crane companies to undercut area wage and benefit standards in Florida. We have posted the following updates for four Beyel customers; the rest will follow in the coming days.
- Tax Liens: All tax filings have been updated. Just over $196,000 in state and federal tax liens (including interest and penalties) have been issued against United Forming in the past few years. The most recent lien issued in May 2012 from the State of Mississippi totals over $80,000 and has not yet been released. To view this and other lien documents please visit the United Forming page.
- Pension/Benefits: The Pension/Benefits section has been updated with 2011 documents for the following plans:
- Employee Stock Ownership Plan: The 2011 Employee Stock Ownership Plan documents show that the number of participants in the plan has continued to drop. In 2008, the plan had 1,108 active participants and in 2011, that number was significantly lower at just 295 active participants.
- 401k Plan: Active participants in the 401k plan also dropped from 798 in 2010 to just 259 in 2011. In 2011 employer contributions also took a large drop falling from $345,214 overall in 2010 to just $4,804 in 2011. This means that United Forming only contributed $18.55 per employee to the 401k plan in 2011. For more information and full documents, visit the United Forming company page.
- Safety/OSHA Record: We have posted an updated list of workers compensation claims and OSHA inspections/violations. Since 2010 Encore has faced twelve new workers compensation claims, and has been the subject of three OSHA investigations which led to $1,755 in fines for six violations.
- Pension/Benefits: Updated 401k documents for the most recent plan years have been posted.
- Safety/OSHA Record: The OSHA violation summary has been updated with the most recent inspections.
- Litigation: We have updated the overall MCM case list, added one new case with full documents and a summary, and updated documents and summaries for several other now dismissed cases.
- Bank United v Munilla Construction Management LLC (dba MCM): Bank United sued MCM as Assignee of Vila & Son Landscaping and its subsidiaries after they claim MCM failed to fulfill a contract made between MCM and Vila. Bank United alleges that MCM owes them damages in the sum of $29,257.20 after they completed conditions of the contract but were not compensated. The case remains pending.
- The following MCM cases have now been dismissed, dismissal documents can be found on MCM’s page: Doors Acquisition v. Munilla Construction, Pita v. Munilla Construction, 777 International Mall v. Munilla Construction, and Arce v. Munilla Construction.
- Pension/Benefits: Updated documents from 2009-2011 have been added to the MCM page. MCM has a 401k plan, which had 157 participants with account balances at the end of 2011. MCM’s website claims the company currently has 556 employees; if this number is accurate it means that the majority of the employees (72%) are not active participants in the 401k plan.
- Safety/OSHA Record: Since November 2011, there have been 16 new workers compensation claims. We have also updated the list of OSHA inspections/violations.
- Litigation: The following cases have been updated:
- American Infrastructure v. Zachry Construction: American Infrastructure, a Pennsylvania general contractor, sued Zachry for allegedly infringing on its logo, and also for using the name Zachry American Infrastructure, which the plaintiff alleged would cause “consumer confusion.” A judgment was entered in favor of Zachry.
- Equal Employment Opportunity Commission v. Zachry Construction: The EEOC filed a suit against Zachry on behalf of a former employee, a female electrician helper, who alleged that she was fired in retaliation for reporting sex based discrimination. The parties filed a joint motion to enter into a consent decree which was approved.
- Knapp v. Zachry Construction: The plaintiff, a former duct installer for Zachry's project with Archer Daniels Midland in Decatur, IL, alleged that he and other older workers were terminated because of their age. Zachry denied the allegations and moved to dismiss the case and compel arbitration. The motion to compel arbitration was granted.
- Pension/Benefits: Updated 401k documents and information for the most recent plan years have been posted.
Litigation Roundup: Music City Temp Firm, Beyel
May 10, 2013
Trojan Labor Case Continues; Temp Firm Reaches Settlement with NLRB
As reported in the February 21, 2013 update below, employees of day labor staffing company Trojan Labor filed a federal lawsuit alleging the company violated overtime and prevailing wage laws, and did not adhere to federal health and safety standards on jobsites including Nashville’s Music City Center. Trojan Labor has since filed a Motion to Dismiss the case, but recent filings indicate that the parties have jointly moved for a settlement conference, which was approved by the court.
Also, The Tennessean newspaper has reported that Trojan Labor has agreed to a settlement with the National Labor Relations Board (NLRB) over charges that it conducted illegal surveillance of employees. Without admitting to wrongdoing, Trojan Labor agreed to notify its employees that it will not disrupt union organizing or illegally spy on its workers.
Trojan Labor workers accused Jeff Bradford of Nashville PR firm Bradford Group of spying on the employer’s behalf. Also according to the article, Trojan Labor employees claim that an unidentified woman infiltrated two of their meetings claiming to be the wife of a day laborer. If true, this represents a comically incompetent scheme, as the woman was spotted leaving the meeting in a Lexus SUV, while Trojan Labor employees are primarily “homeless and semi-homeless” according to previous court filings.
Beyel Litigation Updated
Our Beyel Brothers Litigation section has been updated, with new cases and settlements in previously reported cases:
Moise v. Beyel Brothers – In this previously reported case the plaintiff sued over injuries and damages allegedly suffered when a Beyel vehicle backed into his car just outside of Beyel's Palm Beach yard. The case was dismissed with prejudice.
McGrath v. Beyel Brothers – Also previously reported, in this case the plaintiff sued over injuries and damages allegedly suffered in a collision with a Beyel crane. This case was also dismissed with prejudice
Beyel v. Cury Group et al – In a new case, Beyel sued claiming it was not paid for a job setting trees at a condo in West Palm Beach. The Cury Group filed a motion to dismiss, while a co-defendant has not yet responded.
Alexandre v Beyel Brothers et al – In another new case, a husband and wife sue over injuries and damages allegedly suffered in a collision with a Beyel vehicle. Beyel filed an answer denying the complaint.
Please visit our Beyel Litigation page for complete information on these cases as well as summaries and filings from dozens of state and federal court cases involving Beyel Brothers.
OSHA File: Overloaded Beyel Crane Tips, Damaging Two Homes
May 8, 2013
Beyel Fined $7,000 for Repeat Safety Violation
The Occupational Safety and Health Administration (OSHA) has finally completed an investigation and released the investigation file from a December 2011 accident involving a Beyel Brothers crane. The file lists the location of the accident as 228 Carina Drive, Jupiter, Florida, a site within the Jupiter Country Club. Carpenter Contractors America, a company working on the site, rented the Beyel crane.
According to the OSHA file, on December 30, 2011 a Beyel Brothers crane (a Grove 40 ton crane) was lifting plywood onto the roof of a single family home when it tipped over, damaging both the house under construction, and the roof and interior of the house next door. The files show that the crane operator had the boom extended 100 feet at 22 degrees over the rear of the crane while lifting a 3,500 lbs load of plywood that was going to be used for the roof. The crane was being operated in excess of the rated load capacity, causing the crane to tip rearwards. According to the files, the operator stated that the overload alarm was sounding at the time of the incident, and that he tried to boom up but the engine stalled and the crane tipped over.
As we have previously reported, Beyel Brothers had a similar accident occur on February 19, 2008 when a crane was overloaded by approximately 100 lbs, which caused the crane to tip over. For this incident, Beyel Brothers was initially given a fine of $3,500, which was later negotiated to $2,625. At the time of this 2008 accident Danny Beyel admitted to the Sun-Sentinel newspaper that “the crane was overloaded and collapsed from the strain," but characterized this as a "freak accident."
For the more recent accident, OSHA initially recommended a fine of $31,500 due to serious and repeat violations, but Beyel contested the findings. On February 8, 2013, after a settlement the violation was reclassified as other than serious and the fine was reduced to $7,000. The documents show that Beyel claims to have addressed the problems though re-training and improved safety processes.
For more information on this accident, as well as information on all past OSHA inspections please visit the Beyel Safety page.
Prophet Equity/Stelling Legal Dispute Continues to Spread
April 16, 2013
As reported in the March 19 and March 28 updates below, Allegiance Crane owner Prophet Equity is involved in a legal dispute with co-founder George Stelling that has spread from private arbitration proceedings into six lawsuits in five Texas counties. Now the matter has extended into the Connecticut court system, where Prophet Equity seeks to issue subpoenas for the deposition of $1.7 billion private equity firm Newbury Partners and a Managing Director of the firm.
Prophet Equity filed a Petition in Dallas County, Texas, for a court order requesting that a Connecticut court order the subpoenas. In the Petition, Prophet Equity claims that “the purpose of the discovery sought by the subpoenas is to gain information regarding the former officer's communications with third parties” – specifically, Prophet Equity wants to investigate whether terminated co-founder Stelling may have shared “confidential trade-secret information” with Newbury Partners and Managing Director Warren Symon.
See our Prophet Equity page for more details and case filings in the Prophet Equity – George Stelling dispute.
OSHA Releases Beyel Fall Hazard File
April 11, 2013
We have obtained an Occupational Safety and Health Administration (OSHA) investigation file from the November 11, 2012 inspection of a Beyel Brothers job site. The file lists the location of the inspection as 3800 NW 115th Ave Doral Florida 33178, which is a building on Miami Dade College’s West campus.
According to the OSHA file, OSHA inspectors noticed a fall hazard concerning one of Beyel’s workers. The Beyel worker was in an aerial lift 16 feet above ground level engaging in rigging and cutting work. While conducting this work the worker was standing not on the floor of the basket as required, but rather on the mid-rail. The OSHA inspector took this photo of the worker. OSHA redacted the worker’s face, but his arm is visible to the left of the redaction box:
The inspector also submitted this photo, making it obvious that the worker is not standing on the basket floor:
Beyel Brothers was initially fined $2,100 for this serious violation but the penalty was reduced to $1,260 after a settlement agreement. Beyel paid the fine on February 26, 2013.
For more information on Beyel’s safety and OSHA history visit the Beyel Safety page.
Investigation Continues Into Fatal Birmingham Airport Accident
April 10, 2013
Brasfield & Gorrie Installed Flight Status Sign that Fell on Family, Killing a 10-Year-Old Boy
On March 22, 2013, a family of five on a layover at newly renovated Birmingham-Shuttlesworth International Airport was checking their flight status when the 300-pound electronic display sign fell onto the mother and three children, killing 10-year-old Luke Bresette. The family was returning home after a spring break trip to Florida.
In the weeks since the accident, it has been unclear who actually installed the sign that fell. But yesterday, general contractor Brasfield & Gorrie issued a statement acknowledging that the “unit that fell forward on March 22 was assembled and installed by Brasfield & Gorrie after it had been manufactured and sent to the airport.”
The Birmingham-Shuttlesworth International Airport Terminal Modernization Project is a $201.6 million, two-phase project that began in the summer of 2011. The project’s joint management team is Brasfield & Gorrie-Bloc Global Services Group. Phase one of the project ended when the new main terminal opened on March 13, just nine days before the tragic accident.
Birmingham law firm Smith Spires & Peddy, representing Brasfield & Gorrie-Bloc Global, also issued a letter yesterday with more details on the ongoing investigation.
Brasfield & Gorrie is a regular customer of crane rental companies that do not meet area standards for wages and benefits, including Beyel Brothers and CraneWorks. CraneWorks performed work on the airport modernization project (unrelated to the interior work done in the terminal).
Allegiance Crane Follies in Miami Gardens
April 5, 2013
A series of misadventures involving an Allegiance Crane, and several Allegiance employees, took place last week during construction of the new Miami Gardens Municipal Complex.
According to our interviews with workers and witnesses, and our own observations, the following series of events occurred at the jobsite on Thursday, March 28, 2013:
- An Allegiance tower crane operator arrived over an hour late for his shift. He likely did not allow the crane to warm up properly, and as he began operating the crane he noticed a problem with the hydraulic pump.
- The Allegiance operator left the cab and headed to the back of the counter jib to check on the motor, neglecting to set the swing brake.
- With the crane still in weathervane, the jib swung and the crane cable hit power lines located just outside the jobsite (see the photo below – the crane cable hit the power lines left of the semi, which was not parked in that spot at the time of the incident):
- The power lines did not collapse, but the incident did cut power to a small area, including the strip plaza located to the left of the power lines in the photo above.
- Florida Power & Light was able to restore power within a couple of hours, but several businesses were affected, including the day care center below. Our personnel arrived on the scene as day care workers stood outside the darkened center:
- Employees of this credit union in the plaza told us that even after power was restored, their computer system was down most of the day:
- An Allegiance crew arrived to change the crane cable, as required by OSHA regulations:
- But apparently the crew did not properly attach the cable grips, and the new cable and the grip came crashing down onto the
- Allegiance crew’s boom truck:
Fortunately no one was injured in the incidents.
The Miami Gardens Municipal Complex is a $50 million project, which is scheduled to be completed later this year. Skanska USA is the general contractor.
Acquisitions Update: Hunter Merchant Buys Mullins Crane
April 4, 2013
Hunter Merchant has continued its recent expansion with the acquisition of the assets of Mullins Crane. In combination with its recent acquisition of Allied Crane, Hunter Merchant now has access to new yards and equipment in Naples, Ft. Pierce and two locations in Ft. Myers. The company is currently in the process of consolidating its new operations on the west coast of Florida.
Hunter Merchant is owned by Steve and Jason Retterath, who co-owned General Crane with current Allegiance Crane President Jim Robertson. Retterath and Robertson oversaw an aggressive expansion plan at General Crane – including buying $100 million in new cranes in a two-year period and new facilities in Las Vegas, Houston and Atlanta – which collapsed into bankruptcy following a wave of creditor lawsuits in 2008 and 2009.
The former partners have now gone their separate ways, but they have each returned to a strategy of expanding their operations, although on a smaller scale. In addition to Hunter Merchant’s acquisitions of Allied and Mullins, Allegiance has acquired USA Mobile Crane in Texas and Action Crane in Florida.
Of the five acquisition rumors we reported in the February 27, 2013 update below, three have now been confirmed. We are continuing to follow up on information we have received on Auburn Crane (potential target of TNT/Southway) and Lakeland Crane (another potential Hunter Merchant target).
Ross Perot Co. Now Part of Prophet Equity/Stelling Disputes
March 28, 2013
As we reported March 19, Allegiance Crane owner Prophet Equity is involved in a legal dispute with terminated co-founder George Stelling. The dispute has spread from private proceedings before the American Arbitration Association to several Texas courts, as several parties fight over subpoenas in five public court cases.
Another case can now be added to this list, involving the investment company founded by Texas billionaire and former presidential candidate Ross Perot:
Altec Lansing, Prophet Equity v. Perot Investments, Collin County TX – The plaintiffs filed a Petition to enforce a subpoena issued by the Arbitration Association. According to the Petition, Perot Investments partially complied with a subpoena, but “objected to producing documents referring to Plaintiffs and documents reflecting communications with Perot investments and one of Plaintiffs' former officer (sic).” The Petition claims that the “information sought is highly critical to Plaintiffs' claims of trade secret misappropriation.”
In a Response, Perot Investments claims that any responsive documents to the subpoena are held by Petrus Asset Management Company, a related private investment advisor which entered into a consulting services agreement with Stelling’s Auxilium Capital Partners. The defendant objects to the subpoena in part on the grounds that it is burdensome, given the 27 non-disclosure agreements between Petrus and Auxilium. Perot Investments further claims that it has tried to work with Prophet Equity on a reasonable compromise to the discovery dispute, and attaches several letters and emails as exhibits to the filing (these begin with Exhibit 3 on page 25).
Also attached to the Response is an Affidavit by Perot and Petrus Chief Operating Officer and General Counsel David Radunsky (page 30), who attaches the consulting agreement between Petrus and Auxilium. Further attachments to the Affidavit include several letters between Radunsky and Prophet Equity’s lawyers Fish & Richardson. In one letter, the firms warns Radunsky that “Prophet Equity has recently discovered that Mr. Stelling and others associated with him appear to be using, or have used, Prophet’s confidential information in connection with work that Mr. Stelling and his associates are performing, or have performed, for the Perot family and/or one or more of its affiliated business entities,” and that Perot must preserve records related to the work performed by Stelling.
The docket sheet from the case indicates that the parties have met in judge’s chambers and are preparing an Order related to the Petition, but the Order was not in the case file at the court as of yesterday.
Any further developments will be covered on this page and our Prophet Equity page.
New Details on Allegiance Power Line Accident
March 27, 2013
We have obtained newly released reports from the Florida Highway Patrol on the accident involving an Allegiance Crane & Equipment driver who took out power lines on I-595 in Broward County, Florida.
According to these reports, an Allegiance crane being driven with the boom extended knocked down power lines, which fell on several vehicles stopped at the intersection of I-595, SR 84 and Hiatus Road in Davie, Florida. The Allegiance driver suffered “non-incapacitating” injuries and was transported to Cleveland Clinic Florida – Westin Hospital.
The following three reports were released by the Highway Patrol (we have redacted some personal information regarding the various drivers):
Allegiance Crane Traffic Crash Report – the Allegiance crane was travelling in a construction zone, parallel to the westbound travel lanes of I-595. Property damage to the Florida Power & Light-owned power lines was estimated at $50,000. The Allegiance driver was charged with careless driving.
Hiatus Road Vehicles – three vehicles on Hiatus Road were struck by the power lines: a 2010 Cadillac Escalade ($4,000 damage), a 2003 Toyota Highlander ($1,000 damage) and a 1993 Pontiac Bonneville ($3,000 damage). All of the vehicles were functional after the accident, and no injuries were reported.
SR 84 Vehicles – another vehicle at the intersection, a 2007 Chevy Uplander, suffered $1,000 in damage. The driver and her passenger were unharmed, but the unlucky driver was cited for “unknowingly operating vehicle while driver’s license suspended, cancelled, revoked or disqualified.”
Online records indicate that the Allegiance Crane employee faces a hearing in Broward County Circuit Court next month on the charge of careless driving.
See our original report on this accident in the January 2, 2013 update below, with links to news articles on the traffic headaches it caused for South Florida drivers.
Acquisitions Update: Barnhart Buys Steel City
March 26, 2013
Another acquisition in the Southern crane industry was confirmed yesterday, as Barnhart Crane announced the purchase of Steel City Crane of Alabama.
Barnhart is one of the few truly national crane rental companies, with locations from Upstate New York to California, primarily in the South and Midwest. Steel City Crane has operated throughout Alabama and the Gulf Coast for over 50 years.
Of the five acquisition rumors we reported on February 27, 2013, two have now been confirmed (Hunter Merchant has acquired Allied Crane). Other information has come in concerning the potential acquisitions of Auburn Crane, Mullins Crane and Lakeland Crane, although none of these rumors have yet been confirmed. We will continue to report on any developments.
Prophet Equity Co-Founder Stelling Suing Over Termination
March 19, 2013
George Stelling, a co-founder of Allegiance Crane owner Prophet Equity, is pursuing a claim against the venture capital firm over his termination, while Prophet Equity has accused Stelling of a variety of misdeeds. The dispute is being arbitrated before the American Arbitration Association, whose proceedings are private. But discovery disputes in the arbitration have spilled out into several Texas courts, shining some light on the situation.
Former Bain & Company employees Ross Gatlin and George Stelling established Prophet Equity in 2007, raising close to $300 million and acquiring a portfolio of companies over the next few years. According to several court filings, Stelling’s case involves “his termination and removal in October 2011 from various entities in which he is a 30% partner or member.” Stelling subsequently founded another firm, Auxilium Capital Partners.
In five cases filed in four Texas counties, Stelling has moved to enforce subpoenas issued by the Arbitration Association, or the subjects of discovery requests by Prophet Equity have filed for protective orders. Each case includes a copy of the subpoenas, which demand a variety of records relating to Ross Gatlin, Prophet Equity and its law firm Jackson Walker, and other venture capital firms including Insight Equity, 10x Capital, Cerberus Capital and Carlyle Management Group.
There are some variations in the Stelling subpoenas, but generally they demand records covering several issues, such as Prophet Equity portfolio companies including Allegiance Crane (and the acquisition of USA Mobile Crane), with a particular focus on the acquisition of Altec Lansing (Prophet Equity sold the audio products company in 2012).
Some of Stelling subpoenas also make reference to any “accounting mischaracterization by Prophet Management,” “any claims of negligence or wrong doing by Gatlin or Stelling” and “documents, including, but not limited to, correspondence or emails, referring to or regarding Gatlin's reputation and behavior.”
According to the Noonan and Auxilium cases below, Prophet Equity has in turn sued Stelling “alleging breach of fiduciary duty, fraudulent inducement, fraudulent concealment, negligent misrepresentation, misappropriation of trade secrets, negligence, defamation, conversion, money had and received, unjust enrichment, and declaratory judgment related to Stelling's alleged mismanagement of” Altec Lansing.
The five cases are as follows:
Stelling v. Wilhelmina J. Harvey, Dallas County TX – Stelling filed a Motion to Compel Wilhelmina Harvey to comply with a subpoena. Mrs. Harvey is the widow of prominent Dallas oilman Michael Harvey, and she controls several investment and oil-related entities. It is not disclosed whether Mrs. Harvey is an investor in a Prophet Equity fund or has some other relationship to the parties involved. She has not yet filed a response to the motion.
Stelling v. BDO USA, Travis County TX – Stelling also filed a Motion to Compel against BDO, the accounting and consulting firm. BDO has not yet filed a response to the motion.
Stelling v. DLH Family Enterprises, Tom Green County TX – Another Motion to Compel was filed against DLH, which is controlled by the Hirschfeld family of San Angelo, TX. The Hirschfelds own Hirschfeld Steel among other entities. According to a 2009 initial public offering, Ross Gatlin was a director or a director nominee of multiple Hirschfeld companies (the registration statement was withdrawn in 2010). In a Response to the Motion, DLH objects to the subpoena on several grounds, including an alleged mix up of two members of the Hirschfeld family.
Noonan v. Altec Lansing, Prophet Equity et al, Denton County TX – Pat Noonan, Managing Director at Stelling’s Auxilium Capital Partners, filed a Motion for a Protective Order against a Prophet Equity subpoena issued by the Arbitration Association. Noonan agrees to produce certain documents requested but objects to others on various grounds. The defendants have not yet filed a response.
Auxilium v. Altec Lansing, Prophet Equity et al, Denton County TX – Auxilium Capital also filed a Motion for a Protective Order, which is nearly identical to Noonan’s motion. The defendants have not yet filed a response.
Any further developments in these cases will be posted here and on our Prophet Equity page.
Sun Crane has Towers up in Downtown Austin
March 11, 2013
As we reported Friday, former Lewis Equipment owner Kyle Lewis has resurfaced in the US crane industry, with a company called Sun Crane & Hoist. Sources in Texas have informed us that Sun Crane currently has three tower cranes working in downtown Austin. The photos below were taken over the weekend.
These cranes are working on the $300 million JW Marriott Austin project, which according to the Austin Statesman will be the largest hotel in Austin, and the largest JW Marriott in the US. The general contractor on the project is Hunt-Hardin, a joint venture between Hunt Construction Group of Scottsdale, AZ and Atlanta-based Hardin Construction Company.
The Austin Chronicle recently reported that labor representatives have claimed that JW Marriott Austin developer White Lodging Inc. is violating the wage provisions the company agreed to uphold in exchange for $3.8 million in development fee waivers from the city.
Also, Australian readers report that Kyle Lewis’ Southern Star Crane & Hoist is alive and well “Down Under." One source claims that some of the photos featured on Sun Crane’s Portfolio webpage are of the $1.5 billion Queensland Children's Hospital at South Brisbane project. The massive hospital project has also seen its share of controversy, with delays resulting from a 600-worker strike and a key subcontractor going “belly up,” according to the Brisbane Times.
He’s Ba-a-a-a-ck…Kyle Lewis and Sun Crane
March 8, 2013
For the past couple of years, a company called Sun Crane & Hoist has been registering to do business in several states: Texas, Nevada, Oklahoma, Wyoming, Florida, Tennessee, Mississippi, Arkansas and others. These corporate registrations usually only listed a Christopher Anderson as a named officer of the company, and gave a PO Box in Las Vegas as the contact address – see the example below from Sun Crane’s Florida incorporation papers:
Sun Crane has a bare bones website, much of it “under construction.” The About Sun Crane section discloses very little, the Contact page is just an email form and a Portfolio page appears to contain stock photos.
But recent filings in California and Louisiana disclose the involvement of Kyle Lewis, former owner of Lewis Equipment, in Sun Crane and Hoist.
In California, the state Contractor License Board lists Kristopher Kyle Lewis as the “Responsible Managing Employee” for Sun Crane, while Christopher Anderson is the President and CEO. Lewis and Anderson are also listed on the Louisiana contractor’s license, and both states give Sun Crane’s address as 2214 FM 1187, Mansfield, TX, about 20 miles southwest of Lewis Equipment’s old headquarters in Grand Prairie, TX.
We have found that Kyle Lewis and Christopher Anderson did business together at least once before, when they were partners (with another individual) in a Nevada corporation, AHL LLC.
Further, Sun Crane’s website provides a link on its Services page to www.azakkteck.com, which is under construction. That website appears to be connected to a company with a catchy name, Azakk Crane & Hoist Technologies, which according to the Texas Secretary of State is controlled by Keith T. Lewis of Arlington, TX – Kyle’s brother.
And finally, California corporate records indicate that Sun Crane and Hoist originally incorporated under the name Hardrock Erectors, later changing to Sun Erectors before taking the name Sun Crane and Hoist. Lewis Equipment’s headquarters was on Hardrock Road in Grand Prairie, and Kyle Lewis owned companies named Hardrock Road Properties and Hardrock Machine Shop.
Kyle Lewis was the owner of Lewis Equipment, a once high flying company that operated throughout the US, Australia and New Zealand. Lewis Equipment filed for bankruptcy in late 2009, and Kyle Lewis was removed as the head of the company by the bankruptcy court. Lewis battled creditors and the bankruptcy court throughout the case, which has still not wrapped up. In an update posted October 13, 2011 we calculated that Kyle Lewis had $11 million in personal judgments hanging over him, and an April 27, 2011 update covered the foreclosure of his Texas mansion. There are numerous other items on Kyle Lewis and Lewis Equipment in our 2011 and 2010 Archives.
Any further information on Kyle Lewis’ activities will be reported on this site.
Acquisitions Update – Hunter Merchant Acquires Allied Crane
March 4, 2013
Since our “Acquisitions and Rumors” update last week, numerous tips have come in, although so far we can only 100% confirm one acquisition – that of Allied Crane by Hunter Merchant.
Hunter Merchant, owned by Steve and Jason Retterath, has expanded to the West Coast of Florida by acquiring Allied, also known as Allied/Mak (the two related companies, Allied Crane and Mak Crane, were merged together in 2009). Hunter Merchant is moving equipment and personnel into Allied’s yards in Naples and Ft. Myers.
Among the many tips we received was this business card, showing that Bruce Heaton, formerly listed as President and a Director of Allied Crane, is now a Hunter Merchant employee:
As Hunter Merchant moves to undercut wages and benefits for crane operators in a new part of Florida, we will increase and expand our coverage of Hunter Merchant. Look for a full profile and history of the company – and the Retteraths – coming soon.
In the meantime, please keep the tips coming to email@example.com.
Allegiance Files Lawsuit against Yacht Transport Company
February 28, 201
Over the last year or so Allegiance Crane & Equipment has been promoting its work with yacht moving companies on its Facebook page. Photo albums containing pictures of yacht lifts, along with posts on Allegiance’s Facebook wall have brought attention to the projects. One of these posts, depicted below, points out the company’s celebrity clientele. According to Allegiance, the company lifted a yacht owned by golfer Arnold Palmer. Allegiance often does tandem yacht lifts with Beyel Brothers, which also posted a picture of the Arnold Palmer yacht on its Facebook page.
It seems that Allegiance’s relationships with one prominent yacht transport company has turned sour. Allegiance has filed a lawsuit against Kevin Cummings dba Yacht Path Marine Group. On its website, Yacht Path describes itself as “a full-service concierge, ready to meet your needs at any time and in any ocean.” It claims to have moved over 300 yachts from one ocean to another in the last year. Kevin Cummings, the man listed as the defendant in the case, is the Director of Operations at Yacht Path.
In the complaint, Allegiance alleges that Yacht Path owes Allegiance $223,849.20. Allegiance claims that it performed all the conditions required by the contract and that Yacht Path in return failed to completely pay for the work.
The contract and payment invoices between Allegiance and Yacht Path attached to the complaint contain the following details:
- The yacht lift job location was at Port Everglades, Berths 30 & 31 in Fort Lauderdale, FL.
- The cargo ships mentioned in contract are “Thor Bronco”, “Berlin Trader”, “Dubhe”, ”BBC England” and “PACC Athena”.
- The leased items on the invoice are listed as follows (prices are the final fees and include mobilization, demobilization, and any overtime when applicable, according to the complaint):
- Liebherr LTM1120 500T (9/18): $20,600
- Beyel 300T (9/26): $17,800
- Leveling Sand & Trash Cans (10/4): $337.10
- Liebherr LTM 1400 & Liebherr LR 1300 (10/3-10/7): $28,912.50
- Flinterstar, Cargo Ship, (10/20): $8,400
- Liebherr LR 1300 (11/1-11/21): $54,500
- Liebherr LTM 1400 (11/22): $11,000
Allegiance’s invoice shows that Yacht Path originally owed Allegiance $328,849.20, but made a total of $95,000 in payments, the last of which was made on 5/17/2012. Allegiance claims that Yacht Path still owes $233,849.20 in payments, the same number requested in the complaint documents.
Yacht Path has not yet filed an answer to Allegiances allegations. We will continue to follow this case, and report on any developments. See our Allegiance Public Records page for more details on this case, and other cases involving Allegiance Crane.
Acquisitions and Rumors
February 27, 2013
Early in 2013 Texas company TNT Crane & Rigging announced the acquisition of Southway Crane & Rigging, a Georgia crane rental company. As we have recently reported, Allegiance Crane & Equipment has acquired Action Crane of Ft. Lauderdale, FL (see January 4, 2013) and south Texas company USA Mobile Crane (see September 12, 2012).
Both TNT and Allegiance are backed by big money – TNT by Odyssey Investment Partners, a New York private equity firm with over $2 billion in investments, and Allegiance by Prophet Equity, a Dallas firm with over $300 million in investments.
With the flow of private equity money into the crane rental industry, and a rebounding economy, rumors of more acquisitions swirl nonstop.
Since the beginning of 2013 we have heard that each of the companies listed below is a possible acquisition target. We have been unable to confirm via traditional public records sources that any of these companies have been, or will be, acquired. But rumors have been repeated often enough, by enough sources, that they are worth reporting here – as rumors:
Auburn Crane – this is a small company – essentially a father and son operation – and does not even have a website. But its location in east central Alabama would provide access to Birmingham, Montgomery, Mobile and the Florida Panhandle. TNT/Southway is rumored to have an interest in Auburn Crane.
Steel City Crane – Steel City has provided crane rental services throughout Alabama and the Gulf Coast for over 50 years. The company is rumored to be a target of Barnhart Crane & Rigging, the national company headquartered in Memphis.
Allied Crane – Allied, also known as Allied/MAK, has yards on the west coast of Florida. Allied is rumored to be a target of Steve and Jason Retterath’s Hunter Merchant, which currently operates in South Florida. At the end of 2012 Allied reported the termination of its employee 401k plan to the US Department of Labor.
Lakeland Crane – we have been hearing rumors of the Retterath’s interest in Lakeland since 2011, when they incorporated a company called PBT Lakeland (see the September 8, 2011 update in our 2011 Archives). Lakeland Crane’s yard would provide a strategic location, roughly halfway between Orlando and Tampa.
In what could be a development related to these rumors, on December 21, 2012, Hunter Merchant owner Steve Retterath incorporated three new entities in Florida with very cryptic names - GHIG-BHAB LLC, BUAHYL LLC, and JA Family General I Inc. It is unclear whether these entities have been set up as holding companies for acquisitions, or if they serve some other purpose.
We will continue to monitor all of these companies and sort through the rumors. In the meantime, if you have any information to share, please feel free to email firstname.lastname@example.org. All communications will be kept strictly confidential.
Music City Workers File Class Action Against Day Labor Firm
February 21, 2013
Employees of Trojan Labor of Nashville have filed a federal Fair Labor Standards Act suit against the temp and day labor staffing company, alleging the company violated overtime and prevailing wage laws, and did not adhere to federal health and safety standards.
According to the complaint filed in US District Court in Nashville, Trojan, which “recruits its employees from the most marginalized and exploited demographic groups in the area, in particular the homeless and semi-homeless,” forced employees to arrive at Trojan’s office at times ranging from 4:00 AM to 6:00 AM daily, and then pay a “carpool fee” for transportation to jobsites. Employees were allegedly only compensated for their time on the jobsite, which usually began at 7:00 AM. Employees were allegedly given various administrative tasks to complete during this wait time.
The plaintiffs further allege they were charged fees for vests, gloves, safety glasses and hard hats, with specialized equipment such as respirators leading to a $25 paycheck deduction. OSHA regulations require employers to provide most items of personal protective equipment at no cost to the employee.
The complaint alleges that with the uncompensated wait time, and the various improper paycheck deductions, Trojan Labor violated federal overtime pay laws. Further, because much of the plaintiffs’ work was done on the publicly-funded Music City Center, Trojan Labor violated the Tennessee Prevailing Wage Act.
Trojan Labor has not yet responded to the complaint. According to an article in the Tennessean newspaper, Trojan Labor owner Jolene Dressel called the case “a nuisance lawsuit that is utterly without merit.”
Allegiance Port-a-John Lawsuit Update
February 4, 2013
As reported in previous updates, Allegiance Crane & Equipment was involved in an accident at the Bellini Williams Island construction site in Aventura, FL in April 2012. An Allegiance crane was lowering "Port-a-Johns" from the upper floors of the structure when one broke loose and struck a worker on the ground.
The injured worker, a leased employee of Commercial Forming Corp. South, filed a lawsuit against Allegiance, the crane operator and project owner Bellini WI LLC. Since we last updated this lawsuit (see October 16, 2012 update below), there have been several new developments:
- Bellini WI LLC filed an answer essentially denying all substantive charges in the complaint;
- Allegiance filed an answer to the amended complaint and sued Coastal Masonry, which rented the crane and operator from Allegiance;
- Coastal Masonry countersued Allegiance and Commercial Forming.
Attached to Coastal Masonry’s filing is the Tower Crane Lease Agreement between Coastal and Allegiance. According to this document, Allegiance rented a Linden Comansa tower crane with an operator at the following rates:
- $15,750 per month for 6 months, operated up to 173 hours per month;
- $61 per hour for the first 27 hours of overtime each month and $79 per hour after that, with a $98 per hour Sunday and holiday OT rate.
- Mobilization fee of $21,500, and demobilization at $25,850;
- Other fees including climbs, foundation anchors, etc.
See our Allegiance Public Records page for more details, including copies of major filings in the case obtained from the Miami-Dade Circuit Court.
Union Prevails in Music City Center Payroll Appeal
January 23, 2013
In a decision released late Friday, a Tennessee appeals court ruled that Nashville’s Music City Center must release unredacted payroll records to IUOE Local 369.
Local 369 sued to gain access to the unredacted records (not including social security numbers) in November 2011, winning the case in the Chancery Court of Davidson County one month later. The Convention Center Authority appealed the decision, leading to last week’s ruling in the Court of Appeals. The union was awarded the costs of the appeal, and the case is remanded back down to the trial court for enforcement. There is no indication whether the Authority will appeal the decision to the Tennessee Supreme Court.
The Music City Center is a $600 million convention center project in downtown Nashville, funded in part with federal Build America Bonds. As the recipient of federal funding, the project must collect – and make open to public inspection – payroll information showing compliance with the Tennessee Prevailing Wage Act.
IUOE's mid-Tennessee Local 369 has been attempting to inspect unredacted payrolls for two years, in order to verify compliance with the prevailing wage law and to determine whether the project has fulfilled Nashville Mayor Karl Dean’s promises about local hiring. The Authority redacted worker addresses on the payrolls, and charged thousands of dollars for the time spent blacking out the information.
Once the certified payrolls are turned over by the Authority, the IUOE will be conducting a study to determine just how close Mayor Karl Dean came to his promise that a "vast majority" of workers on the project would be local residents. The Authority has said that just over 60% of the workers on this project are local, but has refused to release data backing up this claim. See our Ceco/Music City Center section for more.
Orlando VA Hospital: Third Miller Act Suit Filed
January 15, 2013
Updating our item from December 12, 2012 below, a third Miller Act suit has been filed against Brasfield & Gorrie over the VA Medical Center project in Lake Nona, FL:
USA v. Axios, Brasfield & Gorrie et al - the US sues on behalf of Southern Power & Controls Corp, a Tampa based electrical contractor. Among many charges, the plaintiffs allege that Brasfield & Gorrie used Axios Construction Services as a “straw man and a sham” small business entity subcontractor, and that Brasfield & Gorrie provided “defective and constantly changing Plans and Specifications” causing “extended home office overhead, general and administrative expenses, and other costs attributable to delayed completion.” The plaintiffs ask for a judgment of $2.8 million. The defendants have not yet filed an answer to the complaint.
In the previously reported case USA (Ace Staffing) v. Florida Aluminum & Steel, Brasfield & Gorrie, et al, the plaintiffs have filed an Amended Complaint adding another insurance company defendant. Brasfield & Gorrie has filed an Answer denying the substantive charges in the amended complaint.
There have been no further filings in the case USA (FL Aluminum) v. Brasfield & Gorrie et al since the 12/12/2012 update below.
Any further developments on the VA Medical Center project, and these three lawsuits, will be covered on this site.
Allegiance Purchases Action Crane
January 4, 2013
Sources are reporting Allegiance Crane & Equipment has purchased the assets of Action Crane Service, a family owned crane company based in Fort Lauderdale. Although there has been no formal public announcement by Allegiance or Action, sources on both sides of the deal have reported it to us.
Action Crane’s yard is just a couple of miles south of Allegiance headquarters (ironically enough, just down Powerline Road – see update below). According to local real estate listings Action’s yard is currently for sale. Our sources indicate that Allegiance is buying Action’s cranes and related assets, but not the real estate.
Allegiance made a similar purchase three months ago, when its owner Prophet Equity announced the acquisition of USA Mobile Crane, a south Texas crane company.
Allegiance Crane Takes Out Power Lines on I-595
January 2, 2013
An Allegiance crane travelling with its boom raised took out live power lines late last week, causing major traffic headaches in South Florida.
According to news accounts, the crane snapped a live power line, which came into contact with several other vehicles on I-595, also known as the Port Everglades Expressway. Eastbound lanes were closed for approximately six hours, while ramps to and from the highway were closed nearly 24 hours. Traffic lights in the area were also affected.
News articles indicate that the Florida Highway Patrol charged the Allegiance crane operator with careless driving. No injuries were reported.