American Architectural Receives Court Approval to Reject World Trade Center Contracts

American Architectural Inc. (AAI) has received court approval to reject the subcontract for ornamental metals and glass work at 1 World Trade Center in New York, along with the cable net wall subcontract, both of which were entered into with Tishman Construction Corp.

According to court documents, the two companies entered into the subcontract for the cable net wall in December 2009, and for the completion of ornamental metals and glass work in March 2009.

Last fall, the company conducted an auction for its assets and in November the court approved the sale of the majority of the company’s assets to PPL Group LLC and Myron Bowling Auctioneers Inc. for $700,000. In addition, the assets related to the facilities leased to AAI by Advanced Acquisitions were sold to A.T. Chadwick Co. for $3 million. However, the subcontracts were excluded from the sales.

“Subsequent to the sale of the assets, there were negotiations between Tishman, the Port Authority of New York and New Jersey and [American Architectural] regarding the possible assumption and assignment of the subcontracts to another entity,” wrote American Architectural in its recent motion requesting approval to reject the subcontracts. “Those negotiations were not successful.”

The company further claimed that it “has exercised its sound business judgment in determining that rejection of the subcontracts is in the best interests of the debtor, its creditors and other parties in interest in this Chapter 11 case.”

This is the second time in the AAI bankruptcy case, filed last June, that its contracts to do work on the World Trade Center project have been in contention. Last August, after several months of discussions, the contract glazier had reached an agreement with general contractor Skanska USA related to its subcontract to perform the interior glass work and interior glass railings for the World Trade Center’s Path Hall.

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