West Los Angeles architect Herb Nadel has filed for Chapter 11 bankruptcy protection to avoid paying as much as $7.6 million to MetLife in a civil suit regarding workmanship at the insurer's Costa Mesa office complex.
Nadel said he filed for bankruptcy Aug. 3 rather than post a $9.75 million bond ordered by a Superior Court judge as security if he elects to appeal the judgment.
According to court documents, a jury in California Superior Court in Santa Ana in August 2000 found Dinwiddie Construction Co., its subcontractors and Nadel negligent for delivering to MetLife in 1986 two leaky buildings at South Coast Corporate Center in Costa Mesa.
The jury determined that Nadel officials should have caught defects in the assembly of the brick skin of the buildings and found him responsible for 15 percent of the total award. Judge David C. Velasquez then ordered Nadel liable for the total award in the event other parties could not pay.
Knowing that some of the subcontractors on the job were no longer in business and assuming he was likely to pick up the cost, Nadel appealed Velasquez's ruling. But the judge said such action would have to be backed up by a bond worth 150 percent of the amount awarded.
Nadel said he offered MetLife three settlement proposals ranging from $880,000 to $2 million, but the insurance giant refused them. Unable to post the bond, Nadel said he had no choice but to file for Chapter 11.
"It's legal blackmail because they're saying 'You either put up the money or I'm going to force you into bankruptcy," he said.
MetLife spokeswoman Toni Griffin said the company stands behind Velasquez's order and had no comment on Nadel's settlement offers.
Nadel does not dispute the leaks in the building, but he doesn't think he should be liable for construction defects over which he had no control.
According to a letter from Nadel to his clients and business associates, he intends to pay all creditors except MetLife on a current basis. He said he anticipates emerging from the reorganization by the end of the year.
Nadel said he has lost some business already and wants to assure current and potential clients that his business remains strong, but he will not pay for other people's mistakes.
A spokesman for Dinwiddie said officials were not available for comment.
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