|F&D caught up in NTG||
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NTG Press Coverage Summary
Fidelity & Deposit Co. of Maryland is the latest company to realize that it was caught holding the bag when now-defunct Network Technologies Group Inc. went belly-up last month.
In court papers filed in Baltimore City Circuit Court in July, F&D says that it issued $13 million in surety bonds for 10 NTG projects — and now it may be responsible for some of that amount since NTG is out of business.
Baltimore-based F&D is a subsidiary of insurance giant Zurich North America.
NTG, which installed fiber-optic cable, was shut down July 12 by Interim CEO John M. Collard.
Collard was installed July 1 by the NTG board after the resignation of co-founder Michele Tobin. After just one day on the job, he discovered accounting irregularities at the company. That led Mercantile-Safe Deposit & Trust Co. to pull a $2.5 million line of credit that was keeping the company afloat.
Surety bonds are often required by subcontractors to ensure they get paid and by governments that want to ensure projects get completed. NTG was bonded by F&D for projects for Cambrian Communications, Adesta Communications, the City of Baltimore, Howard County Public Schools, WorldCom Inc., and the town of Taneytown in Carroll County, court records show.
After NTG's collapse, F&D sued NTG and several former officers to open up the company's books so it could figure out how much it owed on the bonds. F&D withdrew the suit July 23 because Collard, an Annapolis turnaround specialist hired by the NTG board, gave them access to the books, said Keith Owens, public relations manager for Zurich North America.
Now F&D is trying to sort through the mess. The amount owed won't total $13 million because some of the work has been completed and others have been paid, Owens said. "We're in the process of processing claims. Our potential exposure will be significantly less than the face amount," he said.
Larry Rulison, Roger Hughlett and Keith T. Reed contributed to this report.
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