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MAY CEO REACHES SETTLEMENT

October 22, 2010 12:35 am

BY CHELYEN DAVIS

Several local construction companies that worked on the Lowe's in southern Stafford County will get only a fraction of what they were owed.

Lewis May, CEO of Arkansas company May Construction, was charged with fraud in Stafford after subcontractors complained he didn't make final payments to them for work done on the Lowe's project in 2008.

May owed about $1 million to more than 10 Virginia companies, including more than $400,000 to Henderson Construction in Fredericksburg.

A two-day jury trial had been scheduled to start Wednesday. Instead, lawyers worked out a settlement. May Construction has two weeks to pay subcontractors $200,000, which is the most the company said it could come up with in a short time, according to Assistant Commonwealth's Attorney Ed Lustig.

May has said in the past that his company suffered financially during the economic downturn.

If the company pays up, the charge against Lewis May will be reduced to a misdemeanor. The deadline, and a court hearing, are set for Nov. 3.

The plea is an attempt to hold May accountable but also get some money to the subcontractors quickly.

"We want our general contractors to do right by the subcontractors. We saw wrong and we just wanted to do what we could to help out our subcontractors," Lustig said.

It also seemed clear that May Construction could not pay the full amount owed, at least not quickly.

"We were shown documentation that leads us to believe that this is the most amount of money that he can come up with in short order," Lustig said. "It's the primary reason we're doing it. We consulted with most of the subcontractors. Our feeling was this was the best deal we could get as far as giving them restitution as quickly as possible."

In addition to the $200,000 May must pay, there is another $200,000 that Lowe's was holding in retainage fees that will be given to subcontractors.

That $400,000 will provide subcontractors about 40 cents on the dollar. Henderson Construction was owed $453,081 and had a federal court ruling in its favor. Heard Concrete in Chesapeake had filed a mechanic's lien in Stafford (as did Henderson) saying it was owed more than $160,000. Josh Pacheco of Copper Masonry said he was owed about $100,000.

The subcontractors said they would have to accept May's settlement and move on.

"It's still a bad deal for us, we're still in the hole quite a bit," said Greg Henderson of Henderson Construction. "We still have a civil claim, but it doesn't appear it's very collectible. It's something, in a bad situation. We're still looking at losing a pretty good chunk of money here."

Pacheco said it's painful to take just part of what he's owed.

"It's one of those things where a little money is better than [none] of it, but still it's a hurting to take," he said.

Henderson and Pacheco said the subcontractors have asked Lowe's to also contribute money to the pot that will be distributed to subcontractors. Henderson said Lowe's saved about $78,000 by not bonding the project, and Henderson suggested Lowe's contribute that amount to the money for subcontractors.

If all goes according to plan, once May pays the $200,000 and pleads guilty to a misdemeanor charge the court will then enter civil orders for all of the affected subcontractors.

That means they can pursue further payment in civil court, if they choose to do so, Lustig said.

Chelyen Davis: 540/368-5028
Email: cdavis@freelancestar.com





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