DACO Construction Corporation

THE DEBTOR’S BUSINESS HISTORY

The Debtor, DACO is a Maryland commercial concrete and utility construction company.  DACO’s President and sole shareholder is Olivio F. Lopes.  DACO filed for bankruptcy pursuant to Chapter 11 of Title 11 of the United States Code on August 10, 2022.  In its schedules DACO reports $1,830,280 in assets and $638,000 in secured claims and $5,073,859 in general unsecured claims.

DEBTOR HAS ISSUES WITH A LARGE CREDITOR

Creditor Washington Air Compressor Rental Co. has filed a motion for a 2004 examination of the Debtor and asserts that based upon the testimony of Debtor at its 341 meeting of creditors, Debtor has, at best, engaged in questionable business practices. Through the 2004 Examination, the Washington Air seeks to cause the Debtor to produce documents and be examined under oath in order to determine the Debtor’s financial condition and the disposition of assets.  Washington Air contends there are transactions indicating the possibility of transfers to insiders. Washington Air contends these transactions include (a) the use of a closely related creditor company, owned by the spouse of the principal of debtor, to perform substantially all of the services of the Debtor, but who remains unpaid for a period of years, (b) the Debtor’s attorney in the state court action is Debtor’s landlord, and (c) the Debtor’s principal is an absentee owner, residing abroad, who has granted check writing authority to others.

WHAT DOES THIS MEAN FOR UNSECURED CREDITORS?

The Court has set November 29, 2022 as the last day for non-government creditors to file proofs of claim in the Debtor’s case.   

Bankruptcy provides a mechanism called a committee of unsecured creditors that can allow unsecured creditors to advocate for their rights to be paid without having to pay lawyers out of their own pockets. This tool can be useful in a case like DACO where it looks like the potential for repayment is small, because it gives creditors better bargaining power. If you have any questions about this page or the DACO bankruptcy, please contact PRLT.