Construction is the number one industry sector we deal with. It is not house developers that get into trouble but the contractors who are working for them or the local authorities. Construction is a tough game and it is a competitive business. Wage and employment costs are high.
The very nature of the industry seems to be to blame each other for anything that goes wrong and one company falling can have a knock-on effect to the next company. We have seen a ‘domino effect’ when larger business have failed like Connaught, Rok and Carillion.
It can be difficult to recover invoices from contractors when a company has failed, and they usually try every reason not to pay. We make sure we get hold of all the business records and have copy records, purchase orders, certificates and everything needed to prove a debt is owed. It can often help for the company directors to stay involved and help us collect the book debts and retentions.
The outcome for a small or medium sized limited company may just be to go into liquidation. We can organise that quite quickly and most debts will usually die when the company is put into liquidation. The assets can often be sold on to the current directors (at market value). For a large company especially with ongoing projects that need to be finished to create value Administration maybe the better option or a Company Voluntary Arrangement.
Unfortunately, sub-contractors are treated as unsecured creditors so have no special rights. Employees can however claim from the Government Redundancy Fund.
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Licensed Insolvency Practitioner