A surety company provided performance and payment bonds to a $20 million high technology/electrical manufacturer for delivery and installation of $15 million in product to ten obligees. When the company began to falter, Guardian was engaged to evaluate the principal and suggest a course of action. Just as we began, the company filed Chapter 11 bankruptcy. Several obligees had already begun assessing liquidated damages, so we dispatched our personnel to the principal's location to assume turnkey responsibility for completing the bonded projects.
New schedules were developed and takeover agreements entered into with obligees. We hired former employees from the now bankrupt principal's crew to complete installation. We re-let jobs to new subcontractors, found alternate suppliers and, where necessary, used our own personnel to redesign and manufacture replacement equipment, develop necessary software and complete the projects. We established disbursement control account procedures, handled contract funds collections, contract administration, provided project management services, and evaluated and settled payment bond claims. Guardian also provided litigation support and expert testimony to the surety's in-house and outside legal counsel. As a result, Guardian reduced the surety's claim losses by $8 million.