Copper Lounge collapse lawsuits, bankruptcy case end in multi-million dollar settlement

Copper Lounge collapse lawsuits, bankruptcy case end in multi-million dollar settlement

Source:, August 8, 2019
By: Jonaythan Ellis and Joe Sneve

The developer and construction company behind the collapse of the former Copper Lounge building in downtown Sioux Falls in 2016 have agreed to a settlement worth more than $4 million.

The agreement, reached in the U.S. Bankruptcy Court for the District of South Dakota and approved by a judge this week, would end most of the litigation resulting from the Dec. 2, 2016 tragedy. That incident killed Ethan McMahon, an employee of Hultgren Construction, and entrapped an upstairs resident, Emily Fodness, in rubble for hours.

Under the terms of the settlement, Hultgren Construction’s insurance company will pay $2 million. Another $1,150,000 will come from property insurance and another $1 million will come from the insurance company of Legacy Developments & Consulting Co.

The agreement ends lawsuits brought against Hultgren and Legacy Developments by the McMahon and Fodness families as well as other parties.

But left unresolved are lawsuits against Rise Structural Associates, the structural engineer on the project. The South Dakota Supreme Court will also consider whether the city of Sioux Falls should have been released from the lawsuits, and a federal criminal investigation is also ongoing.

Hultgren Construction declared bankruptcy last summer. Initially, the company wanted to offer only its insurance policy to settle claims.

“That wasn’t enough to get everybody satisfied,” said Dan Fritz, a lawyer who represents the Fodness family.

The settlement was made possible when additional insurance policies were added to the mix. Fritz declined to say how much his clients will receive.

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