MGT Construction, based in Richmond, VA, is closing down its operations after nearly three decades of business.
The construction company’s closure comes as its parent, real estate company Cushman & Wakefield | Thalhimer, is facing a lawsuit filed in October.
“MGT is experiencing financial challenges,” Thalhimer chairman, president, and CEO C. Lee Warfield III told
Richmond Times-Dispatch, adding that the contracting company is still operating but is not pursuing any new projects and is working to complete existing ones.
Warfield explained that MGT Construction is a separate corporate entity, distinct from Thalhimer.
“Looking forward to 2018, we are bullish on the region’s business climate and our company’s ability to perform at a high level for our clients,” Warfield commented on Thalhimer’s commercial brokerage business.
When asked for his thoughts about the lawsuit MGT is facing, Warfield did not provide any comment.
Richmond Times-Dispatch reported that MGT’s pending closure is seemingly related to its poor performance, not the lawsuit. However, the lawsuit alleges that top Thalhimer executives had mismanaged and violated an Employee Stock Ownership Plan (ESOP) that the company had adopted on January 01, 2003. Filed October 26 in the US District Court in Richmond by former Thalhimer senior vice-president and board director Steven B. Brincefield, it accuses top executives of infringing the Employment Retirement Security Act of 1974, breach of fiduciary duties and conspiracy, and other charges.
The civil document alleges that the stated purpose of the stock ownership plan was to allow employees to share in the growth of the company. Brincefield, however, claimed that the goal of the plan was to enrich only the top executives.
“One purpose of the ESOP was to create a market and financing mechanism to buy out the [top executives’] shares of company stock at favorable prices,” the lawsuit says. “Put simply, the goal was for Thalhimer to become a tax-free cash warehouse for the benefit of [top executives].”
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