McGill debtors withhold payment over quality disputes

Collapsed contractor McGill was in dispute with several companies over alleged poor workmanship and communication issues before it went under, according to administrators.

The Dundee contractor, whose turnover was too small to require publication, collapsed in August 2022, blaming loss-making contracts. Since then, administrators at Leonard Curtis said they had received claims from creditors totalling £3.8m.

A new report published by Leonard Curtis states that a specialist company estimated McGill was owed £4.6m by others.

However, the report notes that a number of companies that were in dispute with McGill issued counterclaims, with some also claiming damages and others refusing to release retentions. It adds that a “high percentage” of debtors’ balances it had been provided were not correct.

“We can advise that since work began collecting in the company’s debtor book, many of the debtors we have pursued have put forward documentary evidence of long-running disputes and complaints relating to the quality of the company’s workmanship and poor communication,” the report says.

“A high percentage of the debtor balances believed to be outstanding at the date the company entered administration were inaccurate, and in some cases false, all of which has had a detrimental impact on progress made over the last 12 months and the total value of recoveries to date.”

This and other issues, including a debtor having gone into liquidation, mean that administrators expect just £756,814 to be recovered and most creditors to lose out.

Former employees – the only group of preferential creditors – are owed a total of £96,688.02 by the firm.

HMRC is owed just over £2m by McGill, and the Bank of Scotland has put in a claim for £588,940.

McGill, lately registered at Companies House as McGill Facilities Management Ltd, worked as a main contractor, as well as in the refurbishment and fit-out sectors.

In March 2019 the firm, then operating under the name McGill & Co, went into administration. It was subsequently snapped up by property tycoon Graeme Carling, through his company United Capital Investments.

In October 2020, Carling, who was then McGill’s chief executive, spoke about having big growth plans for the business, predicting it would become part of a £500m-turnover group. At the time, the three construction firms he owned had a combined revenue of £50m.

Carling’s directorship of McGill was terminated in June 2021. United Capital Investments, where Carling is still a director, remained its owner until McGill went under in 2022.

United Capital Investments has since been renamed PRS International Group.

Following the administration, McGill’s fire and security division was sold in a prepack deal to Galashiels-based SPG Fire & Security Ltd.

Source link

About The Author

Scroll to Top