Fluor Corp., which employs about 2,600 people at its Sugar Land operations, may take a pre-tax hit of $60 million after a jury award against its Fluor Daniel Caribbean Inc. subsidiary.
Fluor said in a statement that it received an “unexpected unfavorable jury verdict awarding $28.8 million to Humphrey’s Cayman Ltd., developer of a Ritz Carlton resort hotel project in the Caribbean.” Fluor Daniel Caribbean was general contractor for the Cayman Islands project.
The additional $31.2 million pre-tax cost Fluor anticipates, which will be taken as a charge in the company’s second quarter, stem from as-yet-undetermined attorneys’ fees, interest and already-billed but uncollectible fees Fluor Daniel Caribbean charged on the troubled project.
Fluor said its subsidiary stopped working on the project after the developer added to its scope “without demonstrating the availability of funding to pay for such extra work.” Fluor said it filed suit in January 2004 to force payment on invoices for work it had already billed. But prior to that suit, the developer fired the Fluor subsidiary, claiming it had breached its contract.
“Fluor strongly believes that this verdict is not supported by the facts or by applicable law and will pursue all possible avenues of reconsideration or appeal,” the company said in a statement.
Fluor provides engineering, procurement, construction, operations, maintenance and project management services. The $9.4 billion-revenue company is headquartered in Aliso Viejo, Calif. and is Fort Bend County’s largest private employer.
