A pair of brothers who paid themselves hundreds of thousands of pounds while their building firm went bust leaving suppliers owed millions are back in business, to the fury of their creditors. Meanwhile liquidators have identified transactions made in the firm’s dying days which still require further investigation, more than two years after the company went under.
Chalcroft Ltd, of Kings Lynn, paid five directors - including shareholders Mark and David Reeve - £950,000 in 2017, despite profits falling to just £14,000 from half a million pounds the previous year. The company then went into liquidation in February 2019 owing more than £12m to suppliers, staff, lenders and the taxman.
An EDP investigation at the time found a pair of new BMWs in Mark Reeve’s driveway and social media posts from Reeve family members employed by Chalcroft showed expensive new cars and holidays in five-star hotels. Now the brothers Mark, 56, and David, 52, have founded a new building firm, Rebro Construction Ltd, in which they are each 25 per cent shareholders, alongside Norfolk businessman Trevor Meierhofer, 42, who owns half the new company.
Bob Dickens, owner of B and D Scaffolding in King’s Lynn, is still owed £118,000 from when Chalcroft went bust. Yesterday he said: “When they missed the first payment they made excuses, and then all of a sudden we learned they’d gone bust. When we looked into everything it came to £118,000 plus VAT they owed us. “I went down the personal route - of trying to sue the directors - because they’re still living in their expensive houses and driving their expensive cars. Mr Dickens, 60, who employs eight full time staff at the firm he founded in 2006, said the debt from Chalcroft nearly bankrupted his company. “It nearly folded us. Fortunately I was able to speak to my creditors, and the bank, and they gave us some time to get back on our feet.” On learning of the Reeves’ new enterprise, he said: “It makes me extremely angry. What can you say? “They seem to do it and the law lets them get away with it. It makes you very angry and very bitter, and I’m not normally like that.”
There is no suggestion Mark or David Reeve have broken the law.
Last September the liquidators did manage to sell one of the company’s assets - a property in Campbells Business Park - for half its listed £360,000 value. The buyers were Mark and David Reeve. But according to the latest liquidator’s report published in June, there is still no guarantee any of Chalcroft’s 420 creditors will see a penny of what they are owed.
Administrator Andrew McTear wrote: “Any dividend to creditors will be dependent on the outcome of our investigations and the costs of realisations and administration of the liquidation.” He reported that an initial investigation into the company’s affairs had “identified various transactions with the Company entered into prior to my appointment for more detailed investigation.”
The Insolvency Service was approached for comment.
When it collapsed, the firm owed a total of £12.3m to around 420 creditors, including £5.8m to suppliers. Some Norfolk businesses were owed six-figure sums. It also owed £3.2m to its bank, £1.1m to the taxman and £530,000 to staff in wages and redundancy pay. This newspaper revealed its top-paid director had a 70pc pay rise.
Rebro Construction Ltd, incorporated in June of this year, has no listed phone number or email address. The directors have not responded to our efforts to contact them for comment.
A business built for 40 years
The company was set up by Fred Chalcroft in 1979 and owned by him until he sold it in 2007. Chalcroft was bought in a management buyout that year by four directors - Mark and David Reeve, Paul Morley and Stephen England. Mr England resigned, Mark Reeve became chairman, with his brother as finance director and Mr Morley as managing director.
Chalcroft Ltd was owned by a firm called Chalcroft Holdings in which the Reeve brothers were the majority shareholders. According to Chalcroft Ltd's 2017 accounts, the firm had a turnover of £58.4m but made a profit of just £14,203, a collapse from £537,832 profit the previous year. The firm was well-known in the town and built the new H&M store in the Vancouver Quarter shopping centre.
Chalcroft’s chairman, Mark Reeve, hit the headlines in 2017 over accusations of a 'cover up' at the Local Enterprise Partnership. He was called before a committee of MPs who accused him of a cover up over a deal Chalcroft had to develop land funded by taxpayers. As well as being chairman of Chalcroft, Mr Reeve was also the chairman of the Cambridgeshire Local Enterprise Partnership (LEP) which used £10m of public money to develop a business park at Alconbury Weald. Chalcroft also signed a £20m deal with a fresh produce firm to build them a new HQ at the Alconbury Weald park.
North East Cambridgeshire MP Stephen Barclay raised allegations about the way the Cambridgeshire LEP was being run at the start of 2017 which were investigated by the National Audit Office.
They found no evidence that public funds had been misused.
20 August 2021