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Construction Insolvency

Construction Insolvency – Your Options

Construction insolvency is one of the most common type of business we deal with as Licensed Insolvency Practitioners. The usual reasons for construction businesses to fail are:

  1. A main contractor disputing the amount due for work done;
  2. A delay in a project having a knock-on effect on all parties’ costs;
  3. The bad debt of a major customer (often another contractor) causing a domino effect;
  4. Poor pricing of a project – often not by the business owner but by an inexperienced employee.

The usual reason we then get called in is due to a company running out of funds, a statutory demand or winding up petition being presentenced by a supplier, or creditor, such as HM Revenue and Customs.

The options open to a construction business facing insolvency are:

  1. Find more money to pay in, or borrow more;
  2. Ask creditors for a time to pay arrangement;
  3. If that won’t work, then possibly a Company Voluntary Arrangement however these are not easy to use in construction cases;
  4. Liquidation;
  5. Administration – useful if work in progress needs to be completed to be invoiced.

It is fair to say the most common outcome above we deal with is liquidation. We help the directors close down the business and lay all the staff off. We then help employees make their unpaid wages claims from the government redundancy fund. We also contact all the creditors giving them the bad news taking that pressure off the directors.

We do all the paperwork needed for a liquidation.

Once appointed we sell the company assets, often by auction and then collect in the debtors. Often book debts in construction cases are disputed so we use a specialist debt collector and surveyor.

Sometimes the director does not want to face the creditors at a meeting. Since April 2017, we have been able to use deemed consent (no meeting held unless requested by 10% of creditors) or a virtual meeting (telephone or video link) to liquidate a company.

If you are under pressure, please give me a call – we have offices across the South of England.


With 25 years' experience of dealing with insolvency
we know its important for us to put you first.
Find out how we
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