Detroit Civil Engineering Firm Files Chapter 7 Bankruptcy

Written by CFB Blogger. Posted in Blog

Lakeshore TolTest CorpLTC Corp. Government Services Inc., dba Lakeshore TolTest, along with LTC Holdings and several other Lakeshore entities which have been sharing headquarters in Chicago since January, have all filed for Chapter 7 bankruptcy in U.S. Bankruptcy Court in Delaware. In bankruptcy documents, the company lists approximately 10,000 creditors; they claim liabilities of between $50 million and $100 million as well as estimated assets between $50 million and $100 million. According to a news account in Crain’s Detroit Business  by Chad Halcom, the Detroit civil engineering firm with troubles ranging from the Kilpatrick corruption scandal* to a loss of lucrative defense contracts in Afghanistan, had been based in Detroit until their move to The Windy City.  Private equity firms Gridiron Capital LLC and Elston Capital Partners LLC, which each reported owning a stake in Lakeshore TolTest among their respective portfolio companies, have removed references to the company from their respective websites. However, Starboard Capital Partners LLC, another private equity firm, at press time is still listing Lakeshore TolTest in its portfolio on its website. The former Lakeshore Engineering Services Inc., which was founded in 1994, had $624 million in revenue in 2010 after their acquisition of TolTest Inc. to form Lakeshore TolTest. The chairman and CEO at that time, Avinash Rachmale, apparently still owns a minority stake in LTC but has recently resigned from the company’s board of directors and currently serves as president and owner of Detroit-based Lakeshore Global Corp. From the Crain’s Detroit Business article, “In May, Rachmale contends in a lawsuit filed against Gridiron, Starboard and several senior executives that the company leadership has committed shareholder oppression, unjust enrichment, civil rights violations and breaches of contract, fiduciary duty, good faith and fair dealing, in a lawsuit at Wayne County Circuit Court”. The company reportedly had at least three defense contracts terminated for default in 2013 with the U.S. Army Corps of Engineers and the U.S. Air Force Materiel Command, valued at over $70 million for various infrastructure projects in Afghanistan. It had appealed those decisions to the federal Armed Services Board of Contract Appeals but, to date, no decision has been reached. When filing Chapter 7 or Chapter 13 bankruptcy, it is crucial that you have the best legal representation available. The bankruptcy attorneys at Client First Bankruptcy are familiar with all aspects of personal bankruptcy; we will give you the best possible advice on your Chapter 7 or Chapter 13 bankruptcy filing. Our number one priority is helping people like you start a new financial life. Call us toll-free at 800-383-6004 Monday-Friday from 8:30 a.m. – 6:00 p.m. (Central Time) and log onto www.clientfirstbankruptcy.com for important bankruptcy information in an interactive format any time that is convenient for you. We are here to fight for your rights. * Former Detroit Mayor Kwame Kilpatrick, his father, Bernard Kilpatrick, and his longtime contractor friend Bobby Ferguson were convicted in U.S. District Court in Detroit. They were accused in a conspiracy to enrich themselves by rigging City of Detroit contracts through the mayor’s office. Kwame Kilpatrick was convicted on 24 of 30 counts, Ferguson was found guilty on nine of 11 counts and Bernard Kilpatrick was convicted on one of four counts. A fourth defendant, former water department director Victor Mercado, pleaded guilty to conspiracy during the trial and awaits sentencing. (The Detroit Free Press)