M&E specialist went under in March, blaming Carillion鈥檚 implosion for its demise
Dozens of firms and former employees are out of pocket by more than 拢11m after Vaughan Engineering Ltd collapsed into administration just before Easter.
The M&E specialist called in KPMG at the end of March, making close to 150 staff redundant and bringing to an end 50 years of trading.
Vaughan, which was set up in 1968 after its Northern Ireland parent set up an office at Broxburn on the outskirts of Edinburgh, said it was felled by Carillion鈥檚 collapse after saying the bust contractor owed it at least 拢600,000. It had been due to carry out more than 拢1m worth of work for the firm in the first quarter of this year.
In a note accompanying its report, joint administrator Tony Friar said: 鈥淭he company incurred significant trading losses in recent years, primarily attributable to two contracts where disputes arose. In early 2018, the cash position significantly deteriorated as a result of the insolvency of a key customer and the resolution of significant customer disputes not progressing as anticipated.鈥�
He added: 鈥淭his resulted in a significant additional cash requirement by the end of March 2018 and attempts to secure additional funding were unsuccessful. In addition, the Company was advised by one of the disputing customers that payment would not be forthcoming in the foreseeable future. These factors resulted in the Company being unable to satisfy its debts as they fell due.鈥�
KPMG said the firm owed unsecured creditors 拢11.1m with out of pocket employees, owed more than 拢800,000 between them, including 拢268,000 in missing wages and holiday pay, told they will only be able to claim up to 拢800 each while unsecured creditors 鈥渕ay receive a small dividend鈥�.
Trade creditors are owed a total of 拢9.2m with the firm facing the largest hit being EON-owned Matrix Control Solutions, owed 拢468,000. HMRC is owed more than 拢668,000.
Secured creditor Danske Bank is owed 拢2.9m and is expected to receive a 鈥減artial鈥� payout, according to KPMG. But it warned: 鈥淭he outcome for the Bank will be dependent on the extent of debtor recoveries secured and the associated costs of realisation and of the Administration generally.鈥�
Vaughan also had offices in Newcastle upon Tyne and Warrington. The company鈥檚 parent, which was set up in 1955 in Newtonabbey, employs around 250 people and remains unaffected by its sister firm鈥檚 administration. Another sister firm, ductwork contractor Brankin, is also unaffected.
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