Friday, March 26, 2010
Canopy firm seeks bankruptcy
DALLAS -- The parent company of the business that built the Dallas Cowboys practice facility that collapsed in a wind storm last May, injuring a dozen people, has filed for protection from its creditors.
Cover-All Building Systems Inc. of Saskatoon, Saskatchewan, said Thursday it will seek to restructure its finances under court supervision while continuing "limited operations." The filing was made under the Canadian law governing bankruptcies, an action similar to Chapter 11 proceedings in the U.S.
Most of Cover-All's nearly 500 employees were laid off Thursday, the company said in an e-mail to The Associated Press.
It was a steel and fabric facility built for the Cowboys by Summit Structures LLC, a Cover-All subsidiary based in Allentown, Pa., that collapsed. Team scout Rich Behm suffered injuries that left him paralyzed from the waist down, and Joe DeCamillas, the Cowboys' special teams coach, had a broken vertebrae.
Both have filed lawsuits against Cover-All and Summit charging gross negligence.
Cover-All faces "significant costs" stemming from matters that include replacement or repair of buildings and litigation, President and Chief Executive Nathan Stobbe said in a sworn affidavit included with its court filing.
In the petition filed Wednesday in Calgary, Alberta, Cover-All said it faces "a reasonably foreseeable liquidity crisis such that the applicants are insolvent" under Canadian law. The accounting firm Ernst & Young was appointed by the court to monitor Cover-All's restructuring.
The National Institute of Standards and Technology issued a report in October saying the Cowboys' facility fell in winds of 55 to 65 mph -- far less than the 90 mph wind speed specified by engineering standards. At least five other Summit-designed buildings are known to have collapsed since 2002.
Stobbe, in his affidavit, said the company "recently" became aware of "potential engineering issues" related to one series of buildings that may make them "susceptible to collapse" in certain weather conditions, including heavy snow or strong winds. The company has notified its customers and suspended the production and sale of all its buildings pending internal and external engineering reviews, he said.
Since the disaster last May, Texas A&M University and the University of New Mexico have hired independent engineering firms to examine their Summit-designed sports facilities and learned that the buildings have design flaws that should be fixed.
Dallas attorney Frank Branson, who is representing both Behm and DeCamillas, said he learned of the Cover-All filing on Friday and immediately hired bankruptcy attorneys to look into it.
"It was a surprise to us," he said. "Going forward, it may cause a delay [in the lawsuits], but I don't think there will be much of one."
Earlier this month, Behm and DeCamillas added three businesses controlled by Cowboys owner Jerry Jones as defendants to their suits, alleging that the companies failed to review plans for repairing the facility.
At the same time, the Cowboys filed suit against Cover-All and Summit claiming they failed to consider warnings from an engineer retained by the team.