Administrators working to liquidate the assets of Perthshire construction company Hadden believe there won’t be any funds left for unsecured creditors owed millions of pounds.
The Aberuthven company went into administration last September, leading to the loss of 67 jobs.
Since then, administrators Alvarez and Marsal have been working to establish the levels of debt in the business and assets available.
In the past six months, more than £400,000 has been raised – a small fraction of the company’s debts of more than £10 million.
Of this, £6.7m is due to unsecured creditors, including around £2m for subcontractors.
Liquidating assets in Hadden Construction administration
The administrators are currently forecasting that the company’s secured creditor, Bank of Scotland, will receive payment in full. It holds a floating charge over the company’s assets.
The bank is owed £541,000 and there were credit balances of around £620,000 when the company collapsed. The administrators are expecting to recover the remaining £79,000.
DM Hall has been instructed to market its Aberuthven headquarters and a property in Croy, North Lanarkshire, for sale.
According to the new progress report from the administrators, just over £400,000 has been raised in relation to work in progress and £29,300 from book debts.
The report said: “Leslie Keats contacted all customers to ascertain their position in relation to the work performed by the company.
“Contact has been made with all customers, who have responded with payment proposals, defects to be costed and other matters.”
A total of £49,300 has been raised from the sale of seven motor vehicles and £5,445 has been raised in relation to the sale of around 120 items of plant and machinery which were sold via an online auction.
“These assets were miscellaneous items owned by the company and stored onsite at the head office,” the report adds.
“The realisations include proceeds from the sale of Heras fencing, a shipping container, ladders, scaffolding and various other items.”
Millions of pounds of debts
In addition to the bank debt, preferential creditors include employees owed wages (up to £800), holiday pay and pension claims. This sum totals £150,000.
HMRC is owed £2.4m.
It is anticipated by the administrators that there will be a distribution for these creditors.
The bulk of the debt is for unsecured creditors. Trade creditors are owed £6.7m and a further £845,500 is due to workers.
The report states: “Based on current estimates, it is highly unlikely there will be a dividend to unsecured creditors as realisations achieved from the company’s floating charge assets will be insufficient to meet the costs of realisation and the preferential claims.”
The cost of the Hadden Construction administration is estimated at around £920,000.
Meanwhile the parent company to Hadden Construction Ltd, Hadden Construction Holdings, is also being wound up.
At a company meeting earlier this month, chaired by Scott Hadden, a resolution was passed to voluntarily wind up this business.
Kevin Mapstone and Kenneth Craig, of Begbies Traynor, have been appointed joint liquidators.
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