Trade creditors could recover less than 0.5p in the pound for debts
Contractor Longcross Construction owed a huge 拢51m to trade creditors when it collapsed, according to the latest statement from administrator Deloitte.
The administrator鈥檚 latest progress report said that these unsecured creditors can expect to recover just 0.4-1.2p for every pound owed.
The previous estimate by administrator Deloitte, made in August last year, suggested the firm owed 拢30m to creditors. Deloitte鈥檚 latest report did not say why the figure had increased so sharply.
However, the document did say that the value of work in progress payments received had 鈥渋n some instances鈥� been substantially below book values because 鈥渁 number of counter claims have been received from clients on projects where the Company ceased work partway through contracts.鈥�
Retail contractor Longcross collapsed into administration in June last year with the loss of 140 jobs. The firm turned over 拢156m in the year to March 2015 according to the unaudited management accounts of the business.
The administrator confirmed it had engaged law firm W Legal to fight a 拢1.16m claim against a subcontractor related to remedial work on a project in 2013. The administrator has previously confirmed this claim is being made against SME engineer GGA, based in Sevenoaks.
The administrator said it had managed to recover a total of 拢2.4m from creditors, of which the vast majority - 拢2.3m 鈥� came from VAT refund from HM Revenue & Custom. The administrator has billed for 拢516k of fees, with total administration expenses more than 拢750k.
It said Longcross鈥� bankers had received 拢2.6m of the 拢6.2m owed, and preferential creditors, whoc are owed 拢202k, are expected to be paid in full.
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