Window and door company Pella Corporation is alleging that architectural glass and metal solutions provider, Apogee Enterprises, has failed to make payments for its purchase of manufacturer of architectural aluminium for commercial construction projects, EFCO, from Pella in June 2017. All three companies are US-based.

Apogee has also allegedly failed to release Pella from a General Contract of Indemnity (GCI) under which the purchaser failed to put up a letter of credit (L/C) as required, despite several requests from Pella's counsel.

Pella is seeking more than US$7.5 million in damages as a result of Apogee's failure to meet the agreed terms of its US$195 million acquisition of EFCO in June 2017.

Construction contract

Part of the complaint focuses on a GCI executed by EFCO, Pella and Travelers Casualty and Surety Company of America in January 2016 for the Wanda Vista Tower Project in Chicago, in which EFCO was awarded a contract.

Travelers later entered into a performance bond and a payment bond in the amount of nearly US$69 million regarding the Wanda project in February 2017.

The filing states that Apogee agreed at its own expense to "use commercially reasonable efforts to secure the unconditional release of Pella and its affiliates from all 'seller collateral,' i.e., letters of credit, bonds, and other such obligations of EFCO, and return to Pella such 'seller collateral.'"

L/C unforthcoming

Pella states that Apogee has so far failed to provide the L/C demanded by Travelers, despite Pella's request in May 2018.

Since then Pella's counsel has requested repeatedly that Apogee and EFCO take the necessary actions to secure Pella's unconditional release from the GCI.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.