The cessation of operations at Trent-Wyatt Contracting, a Jefferson City-based company that had a large erosion-control contract at the Merchants Greene development in Morristown, has created a complicated legal wrangle involving city government and Western Surety, Trent-Wyatt’s former bonding company, officials say.

Trent-Wyatt obtained a bond through Western Surety that guaranteed erosion-control work, including a piping system and catch basins to convey runoff to a retention pond, would be completed. If Trent-Wyatt didn’t perform the work, Western Surety would be on the hook for construction costs.

On June 5, 2019, however, Western gave a 30-day notice it was terminating its liability under the erosion-control bond, according to Morristown City Attorney Lauren Carroll.

That date is important because it’s 29 days after one of Trent-Wyatt’s owners, Kevin L. Trent, filed for personal Chapter 7, or liquidation, bankruptcy. The other company owner, Gary W. Wyatt, filed for personal Chapter 7 bankruptcy on July 11. Both Trent and Wyatt estimated their liabilities range from $10 million to $50 million, according to their bankruptcy filings.

Western Surety was released from the erosion-control about nine months ago. What complicates matters, Carroll says, is calculating how much work remained when Western Surety was released from the bond. Carroll and Michael Poteet, Morristown stormwater coordinator, estimate it will cost approximately $750,000, and that’s the amount Carroll is seeking to recover from Western.

On Thursday, Carroll declined to identify how much Western Surety is willing to pay, but the city attorney did say it was “substantially less” than $750,000.

Morristown real estate developer Shannon Greene, one of the developers of the Merchants Greene property in West Morristown, said Thursday the dispute between Morristown government and Western Surety has “nothing to do with him.”

That’s partially correct, Carroll says. The city attorney says that while legal action is a possibility, she’s trying to negotiate a mutually acceptable settlement with Western to finish the erosion-control work. The Greene family owns the property, and ultimately is responsible for installing the stormwater system specified in the plans, according to the city attorney.

Greene says it’s too early to install drainage pipes because the location of the stormwater system will be dictated by future tenants. It makes no sense, Greene says, to lay underground pipes that could run beneath a restaurant, hotel or other business. Similarly, spreading topsoil and seeding it with grass isn’t smart if it’s going to be removed in the foreseeable future, Greene says.

However the erosion-control bond conflict is settled, Morristown city government and Greene are compelled to work together on other development-related matters in the future, Carroll says.

Part of the tax-increment financing arrangement the Greene’s received when they began the development required them to put up a traffic signal at the intersection of West Andrew Johnson Highway and Howell Road. The proposed deadline is in the fall.

Greene says it’s too early to install a traffic light. He says it makes more sense to spend the money when the road linking Merchants Green and Exit 4 of Interstate 81 is complete. That’s when he anticipates interest in Merchants Greene will dramatically increase.

He says Merchants Greene has created approximately 800 new jobs, and he would appreciate a little flexibility from city government in trying economic times that have been disastrous for prospective buyers.

“Nobody thought the economy would fall like this,” Greene said.

The developer says that if he were to move immediately to order traffic signals, there’s no guarantee they would arrive by fall. He says the overwhelming majority of traffic light components are manufactured in China.

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