| Boston (AP) — The largest construction contractor on Boston’s beleaguered Big Dig project filed for bankruptcy protection Monday, the first business day after federal prosecutors charged the company with lying about its work.
Modern Continental Co. made a Chapter 11 filing in federal bankruptcy court in Boston, alleging the state of Massachusetts failed to pay it for construction work — work for which the state says it was overbilled. The firm has been paid more than $3 billion for Big Dig work.
The bankruptcy petition lists debts of $500 million to $1 billion owed to more than 200 creditors, and assets of $100 million to $500 million.
Massachusetts Turnpike Authority spokesman Mac Daniel said the state is holding back $20 million from Modern Continental because of disputes over its work.
The Big Dig created a series of bridges and tunnels to replace Boston’s old Central Artery. At $14.8 billion, it is the most expensive highway project in U.S. history.
The bankruptcy filing says Modern Continental’s board voted to seek protection from creditors on June 11, more than a week before Friday’s filing of criminal charges.
Federal prosecutors allege that Modern Continental lied about the quality of its work on two areas of the tunnel system, including a section where a ceiling collapse killed a woman. If convicted, the Cambridge-based firm faces up to $24.5 million in fines, as well as restitution payments.
The company said the charges are unfounded.
After the bankruptcy filing, the company said in a statement it has struggled to collect on some of the more than $1 billion in construction work it has completed the past four years, much of it in its home state.
Modern Continental said it expects “no substantial change in its operations” due to the bankruptcy.
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