Firm files fraud action for client against BAE Systems in Port of SF dispute

February 15, 2017 – Firm client Puglia Engineering today filed a $10+ million dollar lawsuit against multinational defense contractor BAE Systems and various of its related entities.  The claims arise over Puglia’s agreement to take control of the BAE Systems dry dock facility located at Pier 70, which is leased from the Port of San Francisco. As recounted in its complaint for fraud and securities law violations, Puglia agreed to acquire the facility by purchasing all of the stock of a BAE subsidiary; however, when Puglia began providing services to the site in January of this year, Puglia discovered that, contrary to BAE’s representations, BAE had failed to maintain, repair and dredge the facility in accordance with its lease obligations to the Port, rendering large portions of it unusable.  Based on these discoveries, Puglia seeks to rescind the transaction.  When the Port discovered these circumstances, it put the parties on notice that the Port had “suffered a loss of revenue due to the decline of its assets resulting from the tenant’s failure to perform the repair and maintenance obligations” of its lease.  BAE disclaimed any responsibility to the Port for this loss.  The Pier 70 facility, the oldest continuously operating private shipyard in the country, currently employs roughly 240 workers.  The lawsuit also names the Port of San Francisco as a defendant, solely on a declaratory relief claim. Puglia is represented by firm partner Randy Erlewine.