Free Memorandum in Support of Motion - District Court of Connecticut - Connecticut

Case 3103—cv—00698-JBA Dgciuiaerg $2 iled 10/16/2003 Page 1 of 2
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
XL SPECIALTY INSURANCE
COMPANY, 1
Plaintiff, 1 CIVIL NO. 303CV0698 (JBA)
V. 1
HOUSING AUTHORITY OF THE CITY 1
OP DANBURY, 1
1 October I6, 2003
Defendant. 1
I, DAVID GHIO, being duly sworn, do hereby depose and say as follows:
I. I am over the age of l8 years, and I understand the meaning and obligation of an
oath.
2. I am the Director of Modernization of the defendant Housing Authority of the
City of Danbury (the "Housing Authority"), and the matters set forth herein are based upon my
personal knowledge.
3. On February I3, 2002, the Housing Authority contracted with VA Construction
Company, LLC ("VA") for the renovation of the High Ridge Gardens public housing complex at
23 Scuppo Road, Danbury, Connecticut (the "Project"). The contract price was $4,998,000.
4. The Housing Authority paid VA the sum of $55,000 for the performance and
payment bonds issued by XL Specialty Insurance Company ("XL") for the Project.
5. VA defaulted on the Project in September 2002.
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Case 3:03—cv—00698-JBA Document 9-2 Filed 10/16/2003 Page 2 of 2
6. In or around February 2003, the Housing Authority notified the underwriter
of the municipal bond issue that provided the funding for the Project, Wachovia Bank,
National Association ("Wachovia"), of an event of default under the bond indenture.
7. On or around May lél, 2003, Wachovia declared a default under the bond
indenture and notified the Housing Authority that it would not release any additional
construction funds for the Project. Since then, Housing Authority has failed to obtain
replacement funding to tender the remaining contract balance to XL.
A 8. Prior to the declaration of default under the bond indenture, the Housing
Authority needed to obtain approximately $1.5 million in additional construction funds to
complete the Project in accordance with the terms of the contract.
9. The U.S. Department of Housing and Urban Development, which has
traditionally provided the bulk of the Housing Authority's construction funding, has
indicated to the Housing Authority that it does not have any plans to fund the completion
of the Project. E j

David `
Subscribed and sworn to before
me this 16th day of October, 2003
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