Beech-Nut plant owner sues building management firm

The owner of the new Beech-Nut baby food plant is suing the firm responsible for building it.

The owner of the new Beech-Nut baby food plant is suing the firm responsible for building it.

The Switzerland-based Hero Group filed suit Sept. 23 against Georgia-based Facility Group, alleging the construction management firm kept money that was meant for contractors.

Hero/Beech-Nut in June 2010 celebrated the opening of its new $124 million factory in Montgomery County’s Florida business park south of Amsterdam.

Roughly two years earlier, the company announced a one-year countdown to the anticipated opening, and the lawsuit contends Facility Group is responsible for the lengthy delay between intended and actual opening dates.

“Facility Group’s breach of its contracts with the subcontractors, as well as Facility Group’s inefficient management of the project and its subcontractors, caused substantial delays in satisfactory completion of the project,” the lawsuit states.

According to the complaint, filed in State Supreme Court in Montgomery County, a contract between the two called for Facility Group to pay all the contractors out of money it got from Hero/Beech-Nut through periodic requests for payment.

Facility Group was paid $4 million as an “overhead and profit fee” for its work administrating the project.

The suit alleges Facility Group didn’t pay some contractors but instead “retained money that it was not entitled to and refused to make payments to subcontractors as required by the contract” totaling roughly $7 million.

“Facility Group’s conduct forced Hero to pay some subcontractors directly in order to avoid even further delays and disruption to the project, even though Hero had already paid such sums to Facility Group for the purpose of paying the subcontractors,” the suit states.

Hero/Beech-Nut is asking for at least $11 million through the court action, including the return of the $4 million payment for the “overhead and profit fee.”

Beech-Nut spokesman Earl Wells in an email said he could not discuss the pending litigation.

“Beech-Nut has filed a lawsuit against The Facility Group and as it is a legal matter proceeding through the courts we will not have any additional comment at this time,” Wells said.

A message left at Facility Group was not returned Wednesday.

Categories: Schenectady County

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