Staff Writer

The attorney representing Maietta Construction through bankruptcy proceedings said he expects the company to emerge rapidly from the process.

“We are properly optimistic,” said Robert Keach of Portland-based Bernstein, Shur, Sawyer and Nelson. “The plan is for this to be a short case, perhaps six months.”

Scarborough-based Maietta Construction, described in U.S. Bankruptcy Court documents as established in 1967 by Louis Maietta Sr., filed for Chapter 11 bankruptcy protection last week in Portland. Chapter 11 bankruptcy allows a company relief from creditors but does not mean it will cease operations, Keach said.

Keach said the contractor is primarily involved in excavation and large-scale site work and fell victim to increases in fuel prices and a lack of construction work.

“The company tried very hard not to take this step,” Keach said.

According to court documents, the company owes money to between 100 and 199 creditors. Keach said company liabilities currently are $7.4 million and assets are $8.2 million. While the balance sheet is in the black, cash flow continues to be a problem, Keach said.

“I expect what we will do is a refinancing of companies within a new structure,” Keach said.

In the court filing, Keach alludes to problems on two large projects dating to autumn 2009 and early this year that “caused the debtor to suffer substantial losses” and prevented it from getting performance bonds needed to bid on other jobs.

Company Vice President Vincent Maietta said one project involved a Maine Department of Transportation contract in the Portland area. The other project in autumn 2009 was construction of the Southern Maine Veterans’ Memorial Cemetery in Springvale, where the state terminated a contract with Maietta Construction about one year into the project.

Keach said the company disputes the state’s decision to terminate the contract and said it would likely take the case to court.

In a Nov. 16, 2009, letter to Vincent Maietta, Peter Ogden, a director of the Bureau of Maine Veterans’ Services,  said the contract was terminated “for failure to substantially complete the work to be performed under the contract by Nov. 14, 2009.”

Ogden claimed Maietta officials failed to properly staff the job, failed to pay subcontractors in a timely manner and failed to properly coordinate the project, among other violations.

Dave Richmond, director of the Bureau of Maine Veterans Service, said a new contractor took over the work and a dedication ceremony for the cemetery is planned for Aug. 24.

In an affidavit, Keach said company officers, including the founding Maietta and seven shareholders, have not been paid salaries as revenues slumped from $12 million annually from 2004 to 2008 to $8 million in 2009. The company also has had difficulty meeting payroll for its current 30 employees.

Keach said debt problems caused by increases in fuel prices and the lack of work were compounded by the company’s strategy of owning instead of leasing its equipment and avoiding seasonal layoffs for what had been 60 employees.

In a motion to the court, Keach asked for a private payroll firm to take over operations to ensure employees are paid and withholdings filed with state and federal governments. Keach said the company paid its employees all they were owned before the bankruptcy filing.

Court records list $527,000 owed to the top 20 creditors, including $67,400 to Cumberland-based Sabara Property Care Inc.; $48,900 to Ferguson Waterworks of Colchester, Vt.; and $48,200 to Pownal-based contractor Albert Blackstone Jr.

In Scarborough, tax records show the company owes more than $16,000 in personal property taxes for business equipment dating to fiscal year 2007 and an unpaid balance for property taxes of $1,700 for fiscal year 2010.

As the company reorganizes, Keach said sales of assets to third parties or an “affiliate” named Maietta Enterprises are possible.

In his affidavit, Keach said the company, which reduced its work force, has also “leased” employees to Maietta Enterprises.

The subsidiary company is getting work, Keach said, but clerks at town offices in Standish and Baldwin said Maietta Enterprises is delinquent on several years of tax payments for properties.

In Baldwin, the company owes more than $11,000 dating to fiscal year 2008, according to town records.

In Standish, where the company owns two parcels totaling about 110 acres, clerks said liens worth more than $9,200 have been placed on the land for delinquent 2009 taxes and the company owes an additional $7,200 for fiscal year 2010 property taxes.

Staff writer David Harry can be reached at 282-4337.