Fiber optic construction company files for bankruptcy amid no-pay complaints

CHANDLER, Ariz. — A construction company overseeing installation of fiber optic internet in the East Valley has filed for bankruptcy amid complaints about property damage and lack of payment.

Tilson, which was constructing a fiber optic network for Blackrock and AT&T’s fiber company called Gigapower, filed for Chapter 11 bankruptcy in late May. In its bankruptcy filing, it alleges Gigapower was withholding payments to Tilson, and early this year, Gigapower terminated its work with Tilson in Arizona.

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Gigapower has filed a lawsuit against Tilson in Arizona claiming Tilson was holding its materials hostage at a warehouse in the Valley.

Tilson has also been hit with a class action complaint from former employees who were terminated in May. They claim they were not given required notice of their terminations. Approximately 117 employees were terminated, according to the filing.

Amid this legal trouble, small business owners say Tilson’s lack of payment has threatened Arizona’s local economy.

Shelley Kranich, who owns Mobile Mix Inc., is one of them.

“We’re a small family-based business,” Kranich said. “We’ve been running a concrete slurry and material delivery company since we moved here.”

Kranich has been operating her business in Arizona for 25 years. She said she was contacted by Tilson as they were installing fiber in the East Valley. Tilson needed her company’s services.

“We were a little bit suspicious with Tilson going in, but they seemed to be a large, reputable company that was in many states,” Kranich said. “There was a pretty big vetting process that we had to go through to become a vendor with them so they kind of made us feel a little bit secure and that they were going to be here for a while.”

Tilson did not disclose to her the fact that they were already facing multiple no-pay complaints from other construction companies.

They were also facing complaints from East Valley residents who alleged Tilson’s work led to serious property damage, ranging from cracked and damaged driveways to homes flooded with sewage water after lines were struck.

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“It feels like a slap in the face the fact that we weren’t necessarily picked as their first person to do this, but were picked as their third person, only because they didn’t pay one and two so now they’re coming to three,” Kranich said.

Kranich said for a month, between March and April this year, her company worked to repair the concrete Tilson was digging up during its installation in Gilbert and Chandler.

Then, it came time for Tilson to pay Mobile Mix’s $31,000 bill.

“And then they decided to stop and cut work and not pay out on anything. The timing was, use you for 30 days, and then about the time your bills came due, they kind of stopped using you,” Kranich said.

Kranich contacted Tilson daily with no luck.

As she filed a complaint with the Arizona Registrar of Contractors, Tilson filed for bankruptcy.

“We’ve had to dip into savings and pull money from funds that we didn’t anticipate to get our bills paid. And that’s an important part, too. We did get our bills paid. Our bills are getting paid. So we’re the ones that are strapped at this point,” Kranich said.

Arizona ROC records show at least 16 no-pay complaints against Tilson have been filed since last year.

Bankruptcy records reveal there are between 200 and 999 entities Tilson owes money to and it totals somewhere between $100-500 million.

“It’s extremely concerning because it does put businesses like ours into hardships, and we’re the only ones in the hardships. The cities still get their fiber optic lines. Residents still get their fiber optic lines. It’s just the people that didn’t get paid that are left out in the dark,” Kranich said.

Kranich’s confidence that she will ever get her money back is low. She questions whether the cities and towns approving these fiber projects, and the large communications companies overseeing the projects, are aware of the damage being done to small businesses.

She is thankful she’s been able to keep her company afloat, but is concerned others won’t be so lucky. She hopes change is made to the fiber industry as a whole so this never happens again.

“I think everybody needs to have their hands in the pot a little bit. I wish that the companies on the top of the food chain were able to get the information from the bottom of what’s really happening on the ground,” Kranich said.

12News contacted Gigapower, asking why it elected to terminate its contracts with Tilson and what the current status of its construction work in Arizona is. 

“We continue to build our network in Gilbert and Chandler with other contractors. Gigapower cannot provide public comment on any matters currently in litigation. We have faith that the justice system will adjudicate the matter thoroughly and arrive at a fair and appropriate conclusion,” a Gigapower spokesperson said.

Gigapower said the company is aware of Tilson’s bankruptcy filing.

Tilson did not respond to 12News’ request for comment for this report.