A contractor’s liquidation process has dragged on past the five-year mark due to a drawn-out pursuit of its clients for outstanding debts.
Newman Scott was owed “significant monies” by unnamed firms when it appointed administrators in March 2019, according to documents lodged with Companies House.
Liquidators had to carry out “significant work” to establish the scale of the amount owed, which included arranging site visits that were then delayed by the Covid pandemic.
Begbies Traynor liquidators have now taken the process into the sixth year.
Newman Scott was owed nearly a third of its revenue — £3.3m against a turnover of £10m — according to its most recent accounts for the year to 31 October 2017.
Most of the debts — £2.5m — were from clients and suppliers.
Begbies Traynor senior insolvency manager Paul Kings told Construction News there were “significant monies due to Newman Scott from customers upon our appointment”.
The pandemic then shut down the construction industry, and the insolvency firm “took the decision to delay our recovery of cash to maximise realisations”, he added.
“There was then a significant amount of time spent analysing, rejecting certain claims and then ultimately agreeing the remaining ones, including a number of employee claims.”
CN understands that liquidators paid out a big dividend to creditors recently.
Newman Scott slumped to a pre-tax loss of £471,700 in 2016/2017 after it made a £100,000 profit the year before.
It appointed administrators from Begbies Traynor in May 2019.
Documents released by the administrator later that year showed it owed £2.1m to unsecured creditors including £1.4m to firms within its supply chain.
In January 2020 its case moved from administration to liquidation, also managed by Begbies Traynor.
