Clemmonsville extension delayed by cash problem: Mainline Contracting declares bankruptcy, shuts down projects

Drivers who were hoping to take the new West Clemmonsville Road extension anytime soon are going to have to wait, now that the company building the road is out of business.

Mainline Contracting Inc. of Durham has now filed for Chapter 7 bankruptcy and shut down, according to filings in U.S. Bankruptcy Court for the Eastern District of North Carolina. A Chapter 7 bankruptcy usually means a company will be liquidated. Mainline had earlier filled for Chapter 11 bankruptcy.

In addition to the West Clemmonsville Road extension, Mainline had been working on a $5.8 million runway-safety project at Smith Reynolds Airport.

Local officials say they now plan to turn to Mainline's insurers to complete both projects.

The city's $4 million road project involves extending West Clemmonsville Road between Old Salisbury Road and Peters Creek Parkway.

Greg Turner, Winston-Salem's assistant city manager, said that city officials met with Mainline after the Chapter 11 filing and learned that the company intended to stay in business and finish work on West Clemmonsville Road. The project was finished except for putting in curbing and gutters and the final asphalt.

But Mainline never returned to the project, Turner said.

"To get it completed in the spring construction season would be my hope," he said.

Mainline filed for Chapter 11 bankruptcy on Sept. 15. A Chapter 11 filing is one in which a company intends to reorganize and stay in business.

But at an Oct. 15 court hearing, an attorney for Mainline said that the company had no cash to continue operations. According to court records, the company shut down on Oct. 12, causing the loss of 180 jobs and leaving a number of projects unfinished.

Tom McKim, the chairman of the Airport Commission of Forsyth County, said that the airport project will be completed because of Mainline's insurance bond. "We do face the prospect of having the project carry over to springtime," McKim said.

Mainline has not worked at the airport since the Chapter 11 filing, he said.

Mainline's insurer, Hanover Insurance Co., told the bankruptcy court in a recent hearing that it does intend to finish projects that are under performance bonds.

Yesterday, Mainline's bankruptcy trustee asked the court to authorize an auction to sell off Mainline's equipment.

What's less clear is what will happen now to a number of Mainline's airport-project subcontractors, who claimed that Mainline didn't fully pay them for their work hauling dirt to the airport. Many of the subcontracting businesses are owned by women or minorities.

"It doesn't look good," said Carole Oduyoye, whose company, F-T Trucking LLC in Kernersville, hauled dirt to the Smith Reynolds project. "I knew all along there were problems, and this confirms that. I'm not quite sure what is going to happen."