Provided by Construction Enquirer.
Hundreds of subcontractors and suppliers will get none of the cash they were owed from collapsed M&E contractor MJN Colston.
Administrator Deloitte has revealed the firm went down with total debts of £49m, leaving nothing for unsecured trade creditors owed around £41m.
Only GE Capital Finance, which provided funding for the company, will get its £4.4m back. Even the taxman will be left £2.8m out of pocket.
Deliotte said in its report: “After discharging the costs of the administration we do not anticipate there will be any realisations from floating charge assets.
“Accordingly, we do not expect any funds to be available to pay a dividend to the unsecured creditors of either MJN or SES by way of a prescribed part or otherwise.”
Net of the GE payment, administrators only managed to raise £711,000, which was soaked up in staff wages and administration fees.
MJN Colston suffered severe cash flow problems as work dried up and turnover fell from £135m to around £100m.
But the final blow was delivered when credit insurance cover was unexpectedly withdrawn from a number of its key suppliers and they refused to supply MJN with further goods.
Deliotte said: “Other creditors in the supply chain became aware that MJN was in difficulty and similarly refused supply.”
The defence estate prime contracting business in Bristol and Bury St Edmonds was bought for £750,000 by rival contractor Integral, led by former MJN Colston managing director Brian Glastonbury.
This saved around 58 jobs, but 389 staff at the general contracting operation were laid off.