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HEAVY DEBTS PUT BALLING OUT OF BUSINESS DEVELOPER, SUBJECT OF PROBE OVER ADMIRAL'S WALK PROJECT, FILES FOR BANKRUPTCY

Balling Construction, one of Western New York's oldest and largest construction firms, is filing for bankruptcy and going out of business.

The company, whose involvement in the stalled Admiral's Walk condominium project is the subject of an Erie County grand jury probe, filed liquidation papers Monday in U.S. Bankruptcy Court.

Based downtown at 712 Main St., Balling listed debts of $11.47 million owed to more than 170 creditors, including dozens of subcontractors who had worked on some of the region's most high-profile construction projects.

"The company has ceased all of its operations," said Harold P. Bulan, an attorney for the construction firm.

A spokeswoman at Marine Midland Bank said today the bankruptcy will have "no effect whatsoever" on the progress of the Marine Atrium office building project on Washington Street, which Balling is building.

Balling's financial difficulties became widely known in April, when the company withdrew as construction manager of Admiral's Walk, an 11-story, 51-unit condominium project near Erie Basin Marina.

Later, Marine Midland Bank foreclosed on loans for the project. In early May, the project was halted. The Erie County district attorney's office also seized documents from Balling in a probe into allegations that $1.4 million had been embezzled from the project.

Henry J. Balling Jr., company president, has declined to comment on the grand jury probe and his company's financial problems. On Monday, he could not be reached to comment. Calls to the company's office were not answered, and Balling's home phone had been disconnected.

Bulan said Monday he could not comment on whether the company's demise was related to the grand jury probe. He also declined to discuss in detail what led to the company's financial woes.

"You can't point to any one thing, not to one 'i' that wasn't dotted or a 't' that wasn't crossed. . . . It was a combination of factors," the attorney said.

According to Bankruptcy Court papers filed by Balling, the company's projected liabilities include up to $7.2 million owed to Marine Midland stemming from the Admiral's Walk shutdown.

Another 172 creditors, mostly other contractors, are owed an estimated $2.85 million. The listed debts also include $223,487 owed to the Internal Revenue Service and state tax authorities.

The company's papers list $2.31 million in property owned by the company, including $1.4 million listed as "accounts receivable."

Bankruptcy Court officials said a meeting of creditors will be scheduled within 45 days.

At the Marine Atrium project, a member of the Balling family, Henry Balling III, is construction manager for the project, but he is working under contract for the bank and the project designer, Cannon Architects & Engineers, said Judi Nolan, vice president for public relations at Marine.

Balling Construction was the original construction manager of the $40 million project, but the new arrangement was made several weeks ago, Ms. Nolan said.

"It's business as usual. The project is on schedule and under budget," Ms. Nolan said. "We're very happy with Hank Balling (III) and with the work that was done before that by Balling Construction."

The company boasts a rich history, from its beginnings as a small masonry company started by eight brothers during the Depression.

Balling was one of the biggest contractors on the $540 million Metro Rail line and built, helped develop or renovated many of Western New York's most visible construction projects, including the Guaranty Building, Villa Maria College, Hilbert College, eight buildings at Canisius College, several Catholic high schools, Theater Place, the Ansonia Centre apartments and Wyoming Correctional Facility in Attica.

"They've had a real strong history in Western New York," Bulan said.

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