Baton Rouge readers who followed a previous story about disputes between contractors and the ownership of the L’Auberge Baton Rouge may be interested to learn that the casino’s litigation woes, far from being over, have recently taken on a new dimension. According to reports, the company that owns the casino and two of its executives are being sued by the company responsible for the construction of the casino’s steel frame.
Pursuant to a $7.9 million contract with Pinnacle, the casino’s parent company, Houston based Postel Industries, Inc. fabricated and erected the casino’s steel frame. The company recently filed a $2.6 million lien against the casino owner in East Baton Rouge, but the construction litigation has been filed in Texas where the company’s fabrication facility is located.
The lawsuit names the casino company’s Chief Executive Officer and Vice President of Construction as co-defendants. The steel company says that it hasn’t received any payment for its work since August, 2012, and that executives from the casino company have refused to communicate. The lawsuit seeks nearly $2 million including attorney fees and $1.7 million in materials and labor costs.
The lawsuit apparently alleges that casino executives either knowingly withheld payment or misappropriated funds designated for construction of the steel frame. According to the casino company’s most recent earnings report, it has spent more than $351 million of the project’s $368 million budget.
Whatever the reason for the delayed payment, the steel company will need to rely on diligent legal counsel to sort through financial records in support of its claims for damages. For its part, the casino company may be equally dependent on skillful counsel to determine the applicability of Texas law to claims related to its Baton Rouge based construction project.
Source: The Advocate, “Pinnacle sued for construction payment,” Ted Griggs, Feb. 6, 2013