Collapsed contractor’s ex-employees still waiting for pay after five years

More than 60 former employees of a collapsed contractor have waited more than five years to be paid money they are owed.

A new report, filed earlier this month at Companies House by administrators at Begbies Traynor, said that the ex-employees were still expected to be paid in full, but the liquidators were “continuing to liaise” with the government-backed Redundancy Payments Service (RPS) over their claims.

Somerset-based groundworks and construction firm RS Cook & Sons filed for administration in February 2019, owing the ex-workers £72,000 in outstanding wages and holiday pay.

The RPS is operated by the Insolvency Service and covers the costs of redundancy payments for former workers at companies that have gone bust.

“There continues to be a number of disparities in the claim, and we are liaising with the RPS to resolve/agree/reconcile the claims and anticipate distributing the full dividend imminently,” said the latest administrators’ report covering the year to January 2024.

There is a strict six-month time limit for individuals applying for payments from the RPS. Data on the speed at which it pays out is not published.

Unsecured creditors of RS Cook & Sons have submitted claims totalling £2.7m. In a progress report in September 2019, those companies were told to expect some dividend, but Begbies Traynor said in the latest report that this amount was still uncertain.

“On the basis of realisations to date and the estimated dividend to preferential creditors, we anticipate a small dividend being available to unsecured creditors,” the report said.

“The timing and size of the dividend will depend on any further claims being received and agreed.”

Secured creditor Barclays Bank was repaid £498,192 by the company within the first year of the liquidation, following the sale of two of its properties.

The Insolvency Service has been contacted for comment on the ex-employees’ claim.

Begbies Traynor said in a statement of proposals in April 2019 that preferential creditors of the company – including the ex-employees – would receive everything they were owed.

At the same time unsecured creditors, including dozens of supply chain companies, were told they could expect a dividend, although their level of payout was uncertain.

RS Cook & Sons went under after experiencing financial difficulties that were blamed on “underquoting at tendering stage” and “the non-release of retentions on some of its larger contracts”.

Directors also said the expansion of the geographical area in which it operated had hit its margins.

The Bridgwater-based firm had traded since 1972. Its turnover was too small to require it to file full accounts, but it held net assets worth £599,333 in March 2018.

The company moved from administration to liquidation in February 2020, but its affairs have still not been settled.

Accounts for the Insolvency Service show that it received 60,000 claims in the financial year 2022/23, up from 45,000 the year before.

It paid out £263.1m in sums it was unable to recover from assets in 2022/23, up slightly from £261.7m in 2021/22.

The same accounts also highlight that the Insolvency Service is concerned about the number of RPS claims it has found to be fraudulent in recent years.

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