Lancashire-based contractor Marcus Worthington and Co owed £1.2m in retentions to its subcontractors and supply chain when it fell into administration at the beginning of October, it has been revealed.
According to a statement of affairs released by administrators PWC, the construction arm of the Marcus Worthington Group owed £290,000 in retentions to building services specialist Briggs & Forrester.
The second-largest sum through retentions was £71,600, which was owed to East Kirby Engineering.
More than £743,000 was owed to the group’s employees before its collapse the report also said, despite an earlier statement from the company stating that their pay was up to date as of 30 September. It is thought that there were around 130 employees at the firm.
In total Marcus Worthington owed £9.1m to all subcontractors and suppliers.
Briggs & Forrester Group CEO Paul Burton told Construction News: “We’re highly unlikely to get [the money owed] back through the administration. We had two projects with Marcus Worthington. On the Forth Banks student accommodation at Newcastle we were owed our final retention which we are unlikely to recover.”
The £40m Forth Banks development was Newcastle’s first build-to-rent scheme for 284 apartments.
Mr Burton added: “The problem is that other people suffer as a consequence of that down through the supply chain.
“On the other project, Deansgate commercial offices in Manchester, we’ve been regained through the client, so we have some chance of future recovery and it won’t hit us as bad as we first thought.”
Some of the worst-hit subcontractors included Northern Steel decking, owed £114,000, which worked with the contractor on the £16.5m student accommodation project on 179 High Street in Lincoln.
HKL Specialists, the cladding subcontractor on the same Lincoln project, was owed £214,000.
Other creditors included Kingspan Access Floors, owed £226,000, and Belfast-building merchants MacBlair, owed £139,000 at the time of the firm’s collapse.
The estimated total deficiency to members was listed at £24.4m, with preferential creditor Cumberland Building Society owed £7.4m in fixed and floating charges.
A further £329,000 was owed to HMRC.
Some £4.2m was owed by the firm in contingent liabilities, including £1.3m to Worthington Mancap LLP, a body linked to Deansgate Investments.
Stonewell Property Company, Marcus Worthington’s property division, was listed as the only shareholder of the company, holding 9,010,000 shares.
At the time of collapse, Marcus Worthington Group said that difficulty to secure loans was the cause of the group’s insolvency. Marcus Worthington and Co directors Russell Worthington and John Marcus Worthington were previously listed as directors at Deansgate Investments, before their appointments were terminated on 16 October this year.
Last week, Construction News revealed that Marcus Worthington’s property division, Worthington Properties, had also fallen into administration, with administrator Deloitte called in.
In the construction arm’s most recent accounts, dated to 31 December 2017, it reported turnover of £39.3m, up £4m on the previous year.
However, the firm’s pre-tax profit fell to £41,600 compared with the £123,800 recorded in 2016.
The accounts also stated that the business owed creditors £11m within the year.