In the News

Federal Judge Allows Indicted N.J. Engineering Firm Birdsall Services Group to Pay Employees

The Star-Ledger

April 02, 2013

As seen in this article, "A federal bankruptcy judge today allowed the indicted engineering firm Birdsall Services Group to access more than $1.6 million in seized money to pay its employees, a temporary lifeline to keep the company afloat and prevent derailing hundreds of public projects across New Jersey.

While acknowledging the gravity of the charges against Birdsall and seven of its former executives, U.S. District Judge Michael Kaplan said at a hearing in Trenton that the collateral damage caused by starving the company to death outweighed the state’s interests in its assets.

Attorneys for Birdsall and the state traded accusations over who was to blame for fruitless negotiations last week that resulted in the company’s inability to pay its 325 employees Friday.

But in a stern response, attorneys for the state disclosed that Birdsall had refused to allow an impartial monitor to review the company’s books and records in return for access to some money, a decision they said raised more questions about what else it may be hiding.

'The executives and shareholders at Birdsall who conspired to use the company to launder money and violate pay-to-play laws are the ones who have put the employees in a bad position, not the state of New Jersey,' Deputy Attorney General Derek Miller said.

Unable to reach agreement with the state, Birdsall unexpectedly filed for bankruptcy in an attempt to sidestep prosecutors and get access to its cash. But lawyer Andrew Sherman, representing the state, said the maneuver was a 'dangerous path' and an abuse of bankruptcy court.

'This is not an appellate court for state matters,' Sherman said. 'If this court allows any leash in bankruptcy, the playbook for criminal forfeiture statutes will be set: criminal forfeiture order in Superior Court, bankruptcy court the next day to seek relief from it.'

Sherman added the company never sought relief from the order with the state judge.

Under Kaplan’s order, none of the more than $1.6 million in payments can go to Birdsall executives or anyone who has been indicted. The judge said his own brush with New Jersey politics, a 2005 run for Bergen County freeholder, opened his eyes to the power of campaign money."