1. FTC Report in New York | Non Payment in a Large Commercial Marine Engineering Project
The subcontractor completed substantial phases of the project, including unanticipated additional work requested by the prime contractor.
Despite repeated invoicing, the prime contractor paid only a fraction of the outstanding amount.
After reviewing the scope of unpaid labor and materials, counsel recommended filing an FTC report while simultaneously preparing for a structured settlement negotiation.
Project Payment Delays and Unilateral Terms
The prime contractor repeatedly postponed payment while providing verbal assurances that final reconciliation would occur at the end of the project.
Key issues included:
• Partial payments without explanation
• Attempts to impose unilateral “final settlement” conditions
• No written change orders for major added work
• Payment proposals significantly below direct cost thresholds
These behaviors aligned with unfair business practices and justified the initiation of an FTC report.
Strategic Use of the FTC Report for Leverage
Because the subcontractor preferred to avoid litigation that could jeopardize future business relationships, the FTC report served as a regulatory pressure mechanism.
Once the report was filed, the prime contractor faced heightened scrutiny and was forced to reengage in negotiations.
2. FTC Report in New York | Legal Violations and Commercial Standards
Counsel identified several violations supporting the filing of the FTC report:
1. Failure to issue written documentation for additional quantities and scope changes
2. Misrepresentation of pricing conditions and settlement terms
3. Unilaterally imposed subcontract prices inconsistent with commercial reasonableness
Key Legal Standards for Unfair Subcontracting Conduct
Applicable New York legal authorities included:
• New York General Business Law (GBL) §349 prohibition on deceptive or unfair acts
• New York contract modification rules requiring written changes for material terms
• Commercial reasonableness standards for cost related pricing
• Prime contractor’s duty to maintain accurate cost tracking documentation
These principles formed a strong legal and regulatory basis for the FTC filing and subsequent negotiations.
3. FTC Report in New York | Evidence Collection and Case Building Strategy
Counsel compiled evidence demonstrating the prime contractor’s commercial misconduct, including:
• Original subcontract and supplemental agreements
• Project drawings, specifications, and quantity analyses
• Independent cost verification reports
• Written confirmations of additional work
• Notices of non payment and settlement rejection statements
Establishing Unfair Commercial Conduct
The evidence showed:
• Consistent delays in payment without legitimate justification
• Payment proposals far below direct and indirect cost levels
• Absence of written authorization for substantial additional work
• A contractor controlled review committee that excluded the subcontractor
• A payment structure that created a risk of financial distress to the subcontractor
Together, these elements demonstrated a systemic pattern of unfair business conduct, which strengthened the FTC report.
Regulatory Action and Negotiation Leverage
The FTC’s interest in the matter placed substantial regulatory pressure on the prime contractor.
Concerned about potential penalties and reputational damage, the contractor initiated settlement discussions.
Counsel then shifted focus toward maximizing recovery while preserving the subcontractor’s long term commercial stability.
4. FTC Report in New York | Fast Case Closure and Settlement Achievement
The legal task force resolved the dispute within eight months. The subcontractor secured a meaningful financial settlement covering unpaid labor and project costs.
Once full performance was confirmed, the FTC report was voluntarily withdrawn.
The dual track strategy—regulatory pressure combined with professional negotiation prevented prolonged litigation, reduced financial exposure, and restored operational continuity.
Importance of Swift Action in Unfair Subcontracting Disputes
Unfair subcontracting cases become more difficult to resolve as time progresses. Early intervention ensures:
• Rapid preservation of essential evidence
• Stronger negotiation leverage
• Prevention of compounding financial losses
• Effective use of regulatory mechanisms, including the FTC report
Experienced commercial counsel is essential to align compliance strategy, pressure tools, and settlement execution.
04 Dec, 2025
