Birdsall sold to CA. engineering firm for $5.6m

Staff Writer

While seven former Birdsall Services Group (BSG) executives await trial on criminal charges of campaign finance violations, much of the nearly 100-year-old company is being sold to a California-based engineering firm. 

On June 5, a federal Bankruptcy Court judge approved the sale of BSG’s name, trademarks and other assets to Partner Engineering and Science, Inc. for a price of $5.6 million.

Under the terms of the agreement, Partner will acquire the Eatontown-based firm’s physical assets – such as desks and equipment – in addition to BSG’s accounts receivable, project files, license agreements and select existing contracts and intellectual property, according to a press release from a BSG spokesman.

Following the sale, which is expected to be finalized in mid-June, Partner will also have to make additional, performance-based payments to the bankruptcy court in 2014.

Partner plans to complete all of BSG’s existing contracts under the new name, according to the release, and to “continue to operate largely as previously.”

“It’s important to maintain continuity,” said current BSG President and CEO Ralph Orlando in a statement.

 “We’re fortunate to have so many loyal clients who have continued to stay with us through our transition to Partner and I have been told by a number of clients who discontinued service that they will look to undertake new contracts with Partner once the sale is finalized.”

Partner also plans on retaining “as many of [BSG’s] staff as possible,” according to the release, and will pursue future government contracts in BSG’s existing service area.

“We share a pride in and commitment to New Jersey and this region,” Partner’s Director of East Coast Operations Frank Romeo said in a statement.

A national engineering and environmental consulting firm first established in 2007, Partner currently has 23 regional offices throughout the country, including one each in Red Bank and Ramsay, NJ.

BSG filed for bankruptcy protection in late March, after the firm’s former CEO and six others were indicted by the state on charges of illegally funneling hundreds of thousands of dollars to elected officials in return for public contracts.

Following the indictments, the state seized $41.6 million in BSG assets, including nearly $5.5 million in cash, claiming they were the proceeds of “criminal activity.” More than 100 employees left the firm, while BSG was forced to furlough those remaining until it could reach a settlement agreement with the state on April 15.

Under that agreement, BSG agreed to surrender more than $2.5 million to the state under a civil forfeiture action and place an additional $1 million in an escrow account to pay any fines, penalties and restitution that could arise from the ongoing criminal action.

BSG officials have been pursuing a sale of the firm’s assets through the bankruptcy court for months.  

Partner President Joseph Derhake said BSG’s existing employees were part of the reason his firm jumped on the sale.

“Working without pay during the crisis was more reflective of the character of these professionals than the alleged misdeeds of the few that got the company in trouble,” he said, in a statement. 

“They’ve been riding this out heroically and we’re really excited to offer them a new home at Partner.”

Derhake added that, while the company will pursue contracts with municipalities, counties and the other public entities that made up much of BSG’s multi-million-dollar portfolio, Partner will not break any laws to do so.

“We are not going to engage in any pay to play,” he said.  “If we can’t win the work based on merit alone, we don’t want that work.”

In the wake of the criminal charges and bankruptcy proceedings, some entities have chosen to either terminate or not renew their existing contracts with BSG.

Officials representing Monmouth County, which as of February had 10 outstanding BSG contracts worth $1.6 million, have publicly stated they would not work with the firm again in the future.

According to county spokeswoman Laura Kirkpatrick, some of those contracts have since been completed and have not been renewed.

Shortly after the sale was approved on June 5, Kirkpatrick said county officials would be discussing how the development would impact the county’s existing contracts with BSG and whether Partner would be eligible for future county work.

Last month, the Holmdel Township Committee announced that it had cancelled a more than $200,000 per year sewer service contract with BSG and transferred it Stantec Consulting Services, Toms River.

At the time, Township Attorney Duane Davison said the governing body had no choice in the decision, as the BSG team that had been providing the contracted services left the company to work for Stantec.

“Birdsall has said they can’t service the contract because this unit went somewhere else,” he said, on May 7.

“If the unit isn’t there, they can’t perform the work anymore.”

On May 20 all seven defendants and BSG pleaded not guilty to their respective charges in state Superior Court, rejecting plea deals that would have carried between three- and five-year prison sentences and a ten-year ban on state contract work. The next hearing has been scheduled for Aug. 5.