Collapse of building company leaves firms owed £12million

Firms could be left millions of pounds out of pocket by the collapse of a Norfolk construction firm.

King’s Lynn company Chalcroft Ltd announced on Thursday it was going into liquidation because of what it called a “series of events within the business”.

A report by its liquidator, seen by this newspaper, reveals the widespread impact the firm’s collapse is going to have on its suppliers, including many smaller Norfolk firms. The firm owes a total of £12.3m to around 420 creditors including £5.8m to suppliers. Some Norfolk businesses are owed six figure sums. It also owes £3.2m to its bank, £1.1m to the taxman and £530,000 to staff in wages and redundance pay. The bill for staff wages is expected to be footed by taxpayers but other creditors are unlikely to get much money back.

Ian Kynaston, managing director of Kynaston Contract Services, which is owed around £140,000 by Chalcroft said: “We are disappointed about the way it has happened. I have been told repeatedly for months by Chalcroft that I would be paid. It is a really sorry state. I don’t expect to get a penny back”.

The report from liquidator McTear Williams & Wood says it is “uncertain” how much money will be left for creditors and lists the value it could get back from selling the company’s assets as ‘nil’. But director Andrew McTear said: “It is likely there will be some money back. There will be a small dividend.” The report said the directors’ reasons for the company failing were customers taking too long to pay and when it took legal action against customers last year to recover debt from them it got back less money than it expected. That left a £1m hole in its balance sheet. It said the company’s problems had gone back several years. In 2015 and 2016 it suffered “significant losses” on two projects. Then in 2016 and 2017 another project overran by more than a year which hit profits. Directors decided on 12 February to place all of the Chalcroft group’s companies into liquidation. A total of 70 jobs are expected to go, including 20 locally around King’s Lynn. Chalcroft said outstanding projects; including the new H&M in King’s Lynn town centre would be completed. A meeting of creditors is expected in March.

Eastern Daily Press
23 February 2019

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