A pair of painting contractors and a bonding company will receive $12 million, according to a May 23, 2003, settlement of claims against the Kentucky Transportation Cabinet in Franklin Circuit Court.

Abhe & Svoboda, of Prior Lake, Minn., was default terminated in December 2000 for failure to make progress on a $14 million contract to overcoat the John F. Kennedy Bridge over the Ohio River in Louisville. Federal Insurance Co., Abhe & Svoboda's bonding company, assumed performance of the contract and sub-subcontracted to Brighton Painting Co. of South Roxanna, Ill. All three eventually claimed that they were delayed by a defective specification and by the Cabinet's inspectors soliciting bribes to gain favorable inspections.

Federal terminated its contract with the Cabinet and sued the state in October 2001, together with Abhe & Svoboda and Brighton, after having completed approximately 60 percent of the contract, for which the companies had been paid approximately $8 million. Abhe & Svoboda's claims against the state included wrongful termination, delay, defective specifications, civil RICO against the inspectors and breach of contract.

Stites & Harbison's Anne Gorham and Buck Hinkle headed the firm's litigation team. The state transportation cabinet, which acknowledged the defective specifications and the criminal conduct of its employee, reports it will take another estimated $10 million to finish the paint job.