The contractor that renovated Clinton G. Martin pool in New Hyde Park and is currently in a dispute with the Town of North Hempstead filed for bankruptcy May 17.
The company, Wantagh-based Gramercy Group, is not liquidating, but is instead a debtor in possession meaning it can still keep some of its contracts and collect debt with the assistance of an appointed trustee, said the company’s attorney Michael McKenna.
North Hempstead is currently withholding $1.97 million from Gramercy Group for aspects of the pool project it alleges are incomplete. The town’s total debt to the company is closer to $2.7 million because of the contract balance and changes Gramercy Group was ordered to complete beyond the contract, McKenna said.
There is “no question [Gramercy Group] will” seek to regain the full debt the Town of North Hempstead owes, the lawyer said.
“That’s not up for discussion,” McKenna said. “The major difference is that the decision will be rendered in bankruptcy court.”
The combination of payment withheld for the pool, and an “adverse judgment” in a lawsuit Gramercy Group has been engaged with since 2016 led to the bankruptcy filing, he said.
Gramercy Group sued Hawaii-based D.A. Builders three years ago, and the suit is now in a confidential settlement stage, said Gramercy Group’s general counsel, Marie Ann Hoenings.
Just weeks before Gramercy Group declared bankruptcy, the Town of North Hempstead’s public works commissioner sent a letter to the company informing it that the town planned to declare it in default. The commissioner, Paul DiMaria, listed projects that he said had to be complete on April 24, 2018, that remain incomplete.
“Due to the recent news that Gramercy Group has filed for bankruptcy, the Town is legally prohibited from moving forward with its default action against the company at this time,” Town of North Hempstead spokeswoman Carole Trottere wrote in a statement.
Gramercy Group sent a 16-page response to the town’s letter on May 15, addressing specific pieces of the project the town deemed incomplete. Some, it says, the company was not informed about until months after April 24. Some are already complete, the letter says.
Delays in project completion were due to mismanagement on the town’s end, Gramercy’s vice president of operations, Gregg Jenkinson, wrote in an earlier letter to DiMaria.
The town has told Gramercy Group that it only has about $950,000 to pay for change orders, Jenkinson wrote. The total amount owed for those is $1.5 million, McKenna said.
“Not one of the issues, that you now say are so important, was raised prior to the Pool Opening,” Jenkinson wrote. “Instead, the issues in dispute were raised only after Gramercy was told that the Town had ‘funding issues.’”
The Town of North Hempstead declined to comment on the letter.
An earlier version of this story said that Gramercy Group’s lawyer was Michael McKennon and that the May 15 letter was 20 pages.