The administrators of failed concrete contractor PC Harrington are now fending off claims of £28m from a contractor and £1.5m from a subcontractor, with Mace and Keltbray named in reports as the companies seeking damages from the company’s remaining assets.
The legal claims are understood to have been lodged after PC Harrington entered administration at the beginning of April, when administrators from KPMG assumed control of its affairs.
The claims are revealed in a document filed at Companies House on 18 August, which reflects the company’s “Statement of Affairs” on 5 May and subsequent information that became available later.
It says that the £28m claim “is subject to a counter claim and has not been admitted and is in dispute”. The £1.5m claim is also “disputed and has not been admitted”.
A spokesperson for KPMG said that creditors can make claims after a company has entered administration, as long as the sums disputed arose before the administration began.
The statement of affairs shows that PC Harrington had an estimated book value of £24.7m versus total liabilities of £28.1m on 5 May. However, the administrators were only certain of being able to realise around £4m, from selling plant and recovering VAT.
Realisable sums from work in progress, originally valued at £9.8m, are listed as “uncertain”.
But if the claims were to succeed, the two claimants would be joining other creditors owed approximately £12m. Major creditors include BRC at £2.1m, Lafarge Tarmac at £2.5m, and O’Keefe Construction at £513,000.
Keltbray is listed as being owed £299,000, while Mace is listed with no sum mentioned.
PC Harrington also owed substantial sums to other companies within the Harrington group that are still trading, including Slipform International and P&E Plant Hire.
PC Harrington worked on some of the UK’s most iconic major structures in recent years, including the Gherkin, the Walkie Talkie and the new Wembley Stadium.
Meanwhile, a report from administrators at Deloitte has also detailed the demise of contractor Longcross, which entered administration on 16 June owing its suppliers £30.1m. In the the year to March 31 2014, it had a turnover of around £190m.
The report says that the contractor suffered reducing and even negative margins, due to:
- insufficient management knowledge and experience of the sectors the business tried to expand into;
- negative margins when procuring works at tender stage and through the initial site stages delays to project completion, and subsequent imposition by clients of damages;
- lack of visibility of up-to-the-minute job costings and work in progress due to deficiencies in the group’s accounting function. This meant that cost overruns were not always identified until it was too late.
