A surety bond save Ohio company million dollar($1.2) after a business it was working with declared bankruptcy. United Architectural Metals (UAM) was able to recover the $1.2 million owed by Trainor Glass Company because Trainor used a surety bond. By using a surety to protect the company’s assets, Trainor was able to properly settle their debts.
In March, we discussed how bankrupt companies employ receiver bonds to cover any mishandling of funds during the bankruptcy process. While that is an example of a surety bond being used after the fact, there are bonds used throughout the duration of a business that protect their assets and creditors. At Jurisco we handle a range of these license and permit bonds including Yacht Broker bonds, health club bonds, mobile home installer dealer bonds, and mortgage broker bonds.
A surety bond aids a business the same way it aids a plaintiff or defendant. When a company wants to take action, be it expansion to a new region or investing money in a building project, the business must prove it can handle the responsibility without causing anyone else a loss.
In the case of UAM and Trainor, the two were involved in a contract concerning the Firekeepers Casino in Battlecreek, Michigan. When Trainor filed for bankruptcy, UAM was the largest creditor listed on their Chapter 11 filing. According to the Glass Magazine article, UAM has between 1,000 and 5,000 more creditors to settle with. Depending on the surety bonds used in those cases, the surety bond company will pay the debts.
To learn more about how surety bonds affect your business contact Jurisco today. With the right surety bond you can be protected against almost anything.