UPDATED: MAY 29, 2018 8:31 AM — National design, infrastructure and construction consultancy CDM Smith is pursuing more than $5.9 million in unpaid fees for a high-profile fertilizer plant it built two years ago in northwest Orange County.
CDM Constructors, the company's construction unit which operates locally out of Maitland, filed a complaint for Pure Bill of Discovery on May 16 against CitiBank and UMB Bank. The builder wants financial details from a fund those lenders oversaw for Anuvia Plant Nutrients while it built a new processing plant in Zellwood.
This filing allows a party like CDM, which may have legal claims against the two banks or Anuvia, to confirm essential facts and uncover names of proper defendants.
Located at 6751 Jones Ave., the 63-acre property owned by Anuvia has eight modular warehouse, office and storage buildings totaling more than 45,000 square feet of conditioned area.
Anuvia produces eco-friendly commercial fertilizer there for agriculture and lawn care. Its plant can produce up to 80,000 tons per year, and has been using human and food waste from local cities and Walt Disney World, the Orlando Sentinel reported last August.
CDM was hired in 2014 to serve as design-build contractor on the project, which was financed that year through sale of bonds issued by the Orange County Industrial Authority.
CitiBank served as trustee to oversee proceeds from the bonds and additional funds supplied by Anuvia, per indenture and loan agreements signed in 2014.
CDM and CitiBank had a direct agreement as well, which defined the trustee's obligation to CDM that was meant to ensure the design-build contractor got paid.
Construction began in late 2014 and was substantially complete in March 2016, per the complaint filing. In August 2017, UMB replaced CitiBank as trustee.
Project funds, which totaled more than $67.585 million, were supposed to be put in an account and used solely for paying for design and construction.
CDM's amended contract value was just over $54.66 million. Given that the owner purchased materials ($6.3 million), funds should have been available to pay for the $60.961 million in expenditures and additional work requested, CDM's attorneys wrote.
But CDM has been told no money is left to pay the $1.342 million balance from its contract, or more than $4.6 million in claims for additional work, per the court filing.
"Anuvia and CDM have been working for several months to resolve their differences," Margaret Richardson, Anuvia's general counsel, told GrowthSpotter on Friday. "Those discussions continue to move forward ... and we've provided the information requested. From our perspective we've provided everything requested from us."
The trustee last paid CDM a portion of its fee in June 2016, three months after the project was deemed substantially complete. At the time more than $11.755 million was available in the project fund, according to a quarterly financial report submitted to the court.
CDM wasn't paid again between June 2016 and June 2017, but the project fund was somehow depleted, per the complaint. Accounting files haven't been provided to CDM to verify how funds were spent.
CitiBank and UMB were responsible for controlling the disbursement of project funds to cover construction costs. If there was ever indication of a shortfall, they were required to report that to bond holders and have Anuvia deposit more money in the project fund.
Funds were supposed to be reserved the entire time to pay CDM's fee, but based on public records found by the builder's attorneys, CMD claims some funds were disbursed improperly by the trustee.
Complicating matters, Anuvia, trustee UMB and bondholders recently entered into a forbearance agreement, which involves a plan to restructure debt owed by Anuvia. That could involve a Chapter 11 bankruptcy filing, and how non-bondholder creditors like CDM will be treated is unclear.
CDM anticipates filing one or more claims against CitiBank, UMB and Anuvia for improper use of project funds, among other potential charges. It's asking for the court to order CitiBank and UMB employees to participate in deposition and general discovery.
Attorneys for CDM declined to comment Friday on the court filing, and attorneys for the banks had yet to be identified.