We have handled complex surety matters for over 40 years. We work closely with our clients to develop and advise on the approach that best suits their objectives and business interests, including with respect to performance and payment bonds, commercial-miscellaneous bonds, fiduciary bonds, and statutorily-created bonds (both before and after claims or exposure may arise).
We also have assisted our clients with resolving complicated, multi-layered regulatory issues to permit them to issue commercial bonds and realize substantial revenue in various industries, such as oil and gas. We regularly aid our clients with drafting and revising surety bond forms and indemnity agreements. We advise our clients on the potential risks and exposure from certain bond forms and bonded contracts or obligations that are often encountered during underwriting.
We provide counsel on all available surety bond defenses, dispositive relief, principal’s defenses, delay claims, surety’s affirmative claims, early use of indemnity agreements, obtaining injunctions, loss mitigation and recovery, bankruptcy, and complex negotiated settlements.
We have vast experience with threats to the performance or completion of the principal’s bonded obligations arising from disputes with an owner or obligee, design-engineering issues, unforeseen-changed conditions, subcontractor performance issues, or the principal’s financial problems or bankruptcy. We are routinely engaged in negotiations with federal, state, municipal, and private bond-obligees during all stages of the process.
When potential default scenarios arise, we advise our clients with respect to their investigation, the surety’s rights and defenses, obtaining assistance or relief from the principal or indemnitors, and the response to the obligee. We assist our clients with evaluating the surety’s options and work closely with the claim professionals (and any consultants) to develop the best plan based on the particular bond, facts, and law of the applicable jurisdiction.
This often includes assessing the potential financing of the principal, taking over and completing the bonded obligations, providing limited or discrete assistance or supervision under a complete reservation of all rights and defenses agreement with the owner or obligee while ensuring to preserve and protect (among other rights or defenses) the penal sum limit of the bond, tendering a new contractor to complete the bonded obligations, consenting to the obligee’s completion of the bonded obligations, pursuing a settlement or “buy back” of the bond, or denying the claim.
During that process, we advise our clients regarding enforcement of their contractual and common law rights against the principal and any indemnitors. In addition to our vast experience in all facets of surety law, we also assist our clients when issues arise within the context of bankruptcy, including pre-petition and post-petition negotiations of reorganization plans, conflicts regarding unpaid proceeds on bonded contracts, bankrupt-principal’s requests to use cash collateral from bonded contracts or contract “trust” funds that should not be part of the bankruptcy estate, disputes relating to the assumption-completion of bonded obligations, the need to remove non-core issues/proceedings from the bankruptcy court, affirmative claims, indemnity claims, and any other issue that arises in the bankruptcy.
When disputes cannot be resolved, we represent our clients in litigation in federal and state courts, arbitration, and various other forms of dispute resolution. We have litigated bond claims brought against our surety clients, the sureties’ claims against the principal and indemnitors, the sureties’ superior rights to receive bonded contract proceeds from owners-obligees, banks, creditors, bankruptcy trustees, and other third parties, and the sureties’ affirmative claims against owners-obligees, architect-engineers, accountants, and other third parties.
We have lectured on all aspects of surety law. We also enjoy participating in the training and education of surety professionals and underwriters regarding various facets of surety law, both while conducting in-house seminars for our clients and while assisting in the investigation or resolution of claims.