Electrical Firm Seeks to Rewire Finances in Bankruptcy

A company that helps keep the lights on for the city that never sleeps has filed for bankruptcy.

Struggling to outlast New York City’s construction slowdown, Michael Mazzeo Electric Corp. turned to Chapter 11 bankruptcy protection to rework its finances. The 31-year-old company, one of the metropolis’s largest electrical contractors, has been on call for some of the Big Apple’s toughest jobs.

After the Sept. 11, 2001, terrorist attacks, the company rushed more than 150 contractors to Ground Zero to help restore power to damaged buildings nearby that housed Wall Street’s financial giants and other major corporations. Verizon’s Manhattan headquarters alone took three years and $70 million to fix, the company said in court papers filed with the U.S. Bankruptcy Court in Manhattan.

Michael Mazzeo Electric later wired the electricity for the luminous Sept. 11 memorial display, which projected beams of light into the space where the towers once stood.

The firm’s electricians specialize in installing the industrial-strength generators, such as the ones that hum behind Mount Sinai Hospital, Harlem Hospital, Memorial Sloan Kettering, Beth Israel and NYU Medical. And the company profited heavily during the economic boom time, watching its annual revenues climb to more than $58 million in 2008 from $23 million in 2000.

But business prospects dimmed with the financial crisis. Company executives said that the firm was hit particularly hard because of its specialty in the financial and health-care sectors. In court papers, it noted that the city’s overall construction spending tumbled 23% to $23.7 billion last year.

Major projects stalled, and those that carried on drew fierce competition that rewarded contract winners with only meager profits, prompting Michael Mazzeo Electric executives to make tough decisions on what bills to continue paying. When it recently couldn’t afford to pay the benefits it promised to employees, union leaders told workers to put down their tools.

“The loss of their workforce in the field, combined with their inability to obtain additional operating capital from their secured lender [Signature Bank] has left the debtor with no choice but to seek the protections afforded by the Bankruptcy Code so that they may reorganize their affairs while continuing to operate,” Chief Executive David Parker said in court papers, adding that the company owes about that bank about $8 million.

Parker said that the company will use the bankruptcy case to make its operations leaner and more efficient. On Tuesday, a judge signed off on a series of requests that would enable the company to continue operating throughout the case.

In its bankruptcy petition, the company said its debts are worth between $10 million and $50 million, but its assets are valued below $10 million.