BY ROBERT P. MADER Of CONTRACTOR’s staff
PHILADELPHIA – Despite the bankruptcy of corporate parent Enron Corp. (December 2001, pg. 3), its mechanical contracting subsidiaries are doing well. They are not part of Enron’s bankruptcy and may be put up for sale to raise cash for Enron sometime in the near future, said Ron Zemnick, president of Williard Inc.
Enron entered the mechanical contracting business when it purchased Williard, Philadelphia; Limbach Constructors, Pittsburgh; Limbach’s Affiliated Building Systems; and its LINC franchise of commercial/industrial service contractors on March 10, 1998.
The mechanical contracting operations operate under the banner of Limbach Facility Services Group and are comprised of Limbach; Williard; ABS; LINC; Harper Mechanical, Sanford, Fla.; Mechanical Professional Services, Orlando, Fla.; Performance Mechanical, Fairburn, Ga.; Western Air & Refrigeration, Compton, Calif.; Limbach branches in Boston, Columbus, Ohio, Pittsburgh, Richmond, Va., and Detroit; and PBM/Limbach Group in Fairfax, Va., that performs mechanical and electrical work.
Zemnick explained that Enron Energy Services Corp. holds the Enron Facilities Services Group, which holds Limbach Facilities Services, and he knows for a fact that Enron Facilities Services is not part of the bankruptcy filing.
At issue in such a bankruptcy filing, Zemnick said, are whether the bank accounts are segregated, which they are, and whether the benefit funds are segregated, which they are. The bankruptcy judge also wants to know if it is in the best interest of the group’s creditors to hold them out of the bankruptcy filing.
"The judge agreed it is in everybody’s best interest for us to be held outside the filing and to continue operating as a separate, independent organization," Zemnick said. "We maintain our own bank accounts, our own cash flow, we’re meeting all payrolls, and we’re meeting all vendor payments in the normal course of business, and we expect to continue to do so."
The operations, which collectively bill hundreds of millions of dollars, continue to aggressively pursue new business, Zemnick said. Each of them would constitute substantial enterprises on its own; Williard, for example has 500 field employees and 130 office employees.
The group’s customers have been coming from its standard customer base from before the acquisition, with only a limited amount of new work coming from Enron, Zemnick said. The contractors did enjoy, however, some cross-fertilization from the different members of the Facilities Services Group because of better communication among Limbach, Williard and Harper, Zemnick said, so sales leads developed from that relationship. In addition, Enron did not require individual members of the group to alter their methods of operation.
Williard has several large projects either just completed or underway. In December it completed a $14 million electrical contract on Philadelphia’s high-profile Kimmel Performing Arts Center. In the next six months it expects to complete a $55 million mechanical, sheet metal and electrical project at the Philadelphia airport’s Terminal One. The firm also won the plumbing and HVAC contracts for the new stadium for the Philadelphia Eagles, which broke ground last summer. Zemnick did not reveal the dollar amount of the contract at the customer’s request.
Zemnick reported that the group’s other branches are similarly busy.
Because of the spectacular failure of Enron, members of the group have had to field questions from customers and vendors and calm their fears.
"The only way you can prove that positively is every week you pay all your bills and meet all your obligations, and we expect to continue to do that on an ongoing basis without any problems," Zemnick said.
"The only outfall is that Enron has to make a decision on its various holdings on whether to sell some holdings and it may opt to sell our group, but that’s their decision not ours," he said. "But I’m sure whoever has enough money to buy the car would have enough money for the gas to keep it running."
Potential buyers would find an attractive package of companies. Limbach recently celebrated its 100th anniversary and Williard has been established for more than 56 years. The firms have a stable customer base, a strong nucleus of office personnel and field forces and high expectations for the future.