Collapsed Devon building firm leaves staggering trail of debt

A South West construction company has left more than GBP4m in debts after going bust. Family-run Brady Construction Services Ltd owes money to more than 200 creditors across Devon and Cornwall including in Plymouth[1], Exeter[2] and Torbay[3]. The Bodmin-based firm, which also had offices in Plymouth, had been working on big projects across the region including the building of new luxury homes at the former Palace Hotel site in Torquay[4].

It also took on the construction of two Paignton[5] hotels after South West construction giant Midas Group Ltd ceased trading[6]. The firm - which was set up in 2012[7] - called a meeting of creditors earlier this month and appointed liquidators last week. Documents filed at Companies House reveal a huge trail of debts.

However, the company has left an estimated GBP3.74m in assets, including freehold land and property worth GBP1.6m and GBP1.8m in cash. This will go a long way towards paying the debts. But it is still estimated that unsecured creditors will still end up short of close to GBP1m.

There will be enough cash to pay 34 workers' wage arrears and holiday pay totalling GBP48,827 and a claim from the tax authorities for GBP279,158. Both of these are preferential claims. However, 35 workers have also made claims totalling GBP232,722 as unsecured creditors.

And there are claims from dozens of companies amounting to GBP4.18m. Among the largest is a GBP427,260 claim from Champion Groundworks Ltd in Liskeard. And EHV Structures Ltd, in Torquay[8], is claiming GBP321,354, while Ocean Recruitment Solutions Ltd, in Plymouth, is owed GBP101,257.

There are more than 200 smaller claims too, including GBP55,000 from Bradfords Building Supplies, in Newnham Industrial Estate, Plymouth, and DA Giles Ltd, in Helston, is short of GBP90,133. Other examples include ASAP Carpentry and Kitchen Ltd, from Tiverton[9], which is claiming GBP27,584 and Beare's Construction Ltd, in Liskeard, is asking for GBP23,914. Although the liquidators have assets they can realise, including GBP2.7m from work in progress and another GBP1.7m owed to Brady Construction Services, it is still estimated that the total shortfall for creditors will be GBP999,590.

So it is likely that creditors will not receive everything they are due. Prior to appointing liquidators Brady Construction Services said the company's financial position meant it had "made the difficult decision" to cease trading on October 30[10]. Brady Construction Services had been working on the Palace Hotel site in Torbay on behalf of the Singapore-based Fragrance Group.

That site has now been shut down and the homes remain unfinished. All have been removed from the housing market. It had also worked across the private, commercial, retail, defence and healthcare sectors, delivering planning, financial management and problem-solving services.

Among projects it worked on were new B&M stores in Bodmin and Wadebridge, the extension to the Wagamama restaurant at Princesshay, Exeter, and the Impact Office Hub at the Royal Cornwall Hospital.

References

1. ^ Plymouth (www.devonlive.com)
2. ^ Exeter (www.devonlive.com)
3. ^ Torbay (www.devonlive.com)
4. ^ at the former Palace Hotel site in Torquay (www.devonlive.com)
5. ^ Paignton (www.devonlive.com)
6. ^ South West construction giant Midas Group Ltd ceased trading (www.business-live.co.uk)
7. ^ which was set up in 2012 (www.devonlive.com)
8. ^ Torquay (www.devonlive.com)
9. ^ Tiverton (www.devonlive.com)
10. ^ cease trading on October 30 (www.cornwalllive.com)