ROSELAND, N.J./December 21, 2010 -- Connell Foley Managing Partner Michael X. McBride and associate Meghan B. Barrett delivered a presentation titled “How Contractors Can Protect Themselves from The Financial Deterioration of Subcontractors or General Contractors/Construction Managers” at the American Institute of Certified Public Accountants (AICPA) National Construction Industry Conference held on December 3-4, 2010, at the Arizona Grand Resort, Phoenix, AZ.
McBride and Barrett discussed how in this current recession, contractors, having significant contract responsibilities, can take proactive steps to reduce their own exposure to financially strapped subcontractors or general contractors.
Additionally, their session provided insight and guidance on the following topics affecting the construction industry today:
- Required Due diligence − Inquire into the project, the developer, and the trade contractors. Careful review of contract terms regarding the form of indemnity, payment terms, ability to assign, default provisions, lien provisions, ability to obtain vendor lists, etc.
- Credit considerations − Bonds: performance and payment, insurance: Subguard policies, letters of credit, guarantees
- Legal considerations − Joint check arrangements, lien rights, bond claims, trust fund rights, Chapter 11 issues
- Other − Meeting with the owner and/or surety, assignability of contracts, bankruptcy issues
Meghan B. Barrett is a member of the Construction Law practice group and the Real Estate and Land Use practice group.
The American Institute of Certified Public Accountants (AICPA) is the national, professional association of Certified Public Accountants in the United States, with more than 330,000 members, including accountants in business and industry, public practice, government, and education; student affiliates; and international associates. It sets ethical standards for the profession and U.S. auditing standards for audits of private companies; federal, state, and local governments; and non-profit organizations.