Buckingham Group’s supply chain claims have nearly tripled to £300m, with worker tribunal claims set to push the total even higher, according to administrators.
The tier one contractor went under last September as it was hit by “significant cashflow pressures” and a number of legacy issues. The £665m contractor’s demise was initially set to hit the supply chain for £108m – but that has now soared to an expected £302.2m.
Administrators at Grant Thornton said it was unlikely that any funds will be available to pay unsecured creditors, including suppliers and subcontractors.
They also warned the figure could climb even higher, as some former employees have launched employment tribunal proceedings against Buckingham Group.
“The tribunals are currently in progress and may result in further unsecured claims in the estate,” the latest administrator update said, adding that further details will come in their next report.
The administrators were initially braced for claims worth £112.8m from 1,292 unsecured creditors, but have received 682 claims worth £266.2m since Buckingham went under. They expect that to grow further still, with 709 outstanding claims worth a predicted £36m. That would take the total to £302.2m.
The administrators also revealed why the process has dragged on beyond the initial completion date of 3 September, citing a number of legal cases against “large debtors”.
So far, they have recruited lawyers from Clyde & Co, Fenwick Elliot and Payments Law to collect substantial debts, and are “considering” further lawyer appointments to deal with another large debtor.
However, they clarified that they only consider legal action against debtors if it is of “benefit to the estate”.
“Where it is, or becomes, apparent through legal advice that the costs of recovery will exceed the potential value of those recoveries the joint administrators will consider ceasing, or not commencing, legal action,” they added.
At the time of its collapse, Buckingham was working on 16 contracts that were less than 60 per cent complete – worth around £318,000, according to the latest update.
It is not clear which contracts are included in the 16. But the firm was working on a number of high-profile jobs when it went under, including an £80m expansion project at Liverpool FC’s Anfield Stadium that is now running late, a landmark Belfast stadium that has now more than doubled in cost, and a £135m car park and commercial site in Swansea.
