Company Overview of Breakell Inc.

Breakell Inc. is being sued in federal court for breaching its contract with Hanover Insurance Co., which issued construction bonds on the two public projects. The lawsuit filed by Hanover involves a $2.5 million upgrade of a wastewater treatment plant in Pulaski County and a $3.9 million athletic field and facility renovation at a high school in Greene County. When Breakell won the jobs last year, it obtained payment and performance bonds issued by Hanover. Such bonds are intended to protect subcontractors and project owners in the event that a construction company is unable to meet its obligations. According to the lawsuit, Breakell informed Hanover last month that it was unable to perform or complete the performance of the work or comply with its contractual obligations on the two projects. As a result, Hanover has determined that it will have to spend $1.2 million on the projects. The lawsuit, filed this week in U.S. District Court in Roanoke, seeks to recover the $1.2 million from Breakell, its chairman and CEO, Stan Breakell, and his wife, Lauren. Stan and Lauren Breakell own property that could be taken as collateral under an indemnity agreement with Hanover, the insurance company claims. After Hanover made a demand for payment, Stan Breakell responded in he do not see any real estate being offered up at this time unless the bank and others consent. As an alternative, Breakell offered a 50-ton crane valued at about $275,000, according to the lawsuit. Stan Breakell declined to comment, saying he had not seen the suit. An attorney for Hanover also declined to talk about the case. It was unclear this week what kind of financial problems - if any - on the construction company's part led to the dispute.