Forrest collapsed owing £28m to unsecured creditors

Aaron Morby 6 months ago

North west builder Forrest collapsed leaving trade contractors and suppliers £28m out of pocket.

According to a report by administrators FRP Advisory even the firm’s banks and lenders, with secured creditor status, stand to lose much of the £17.6m they are owed in the wake of Forrest’s failure.

The report reveals that French energy services giant Engie agreed to pay £1.3m for Forrest’s profitable housing maintenance and energy operations, which were sold on the day the company collapsed on 7 December 2018.

This safeguarded around 59 jobs as contracts novated over.

Administrators reveal that they were called in last October by directors to review the viability of the Bolton-based firm’s operations after it became apparent that an earlier financial restructuring in March 2017 failed to raise enough credit to fund the business.

Shareholders stumped up £5.5m and raised £4m in credit during the exercise, which saw the CEO and managing director also leave the business and much of the leadership change in the following months.

But Forrest failed to overcome its financial stresses as further losses and defects emerged on jobs, leaving an extra funding shortfall of £6m.

Forrest’s banks and shareholders were unable to provide further financial support, forcing the directors to try to sell the business.

Despite seven firms looking at company accounts, the best offer received was from Engie for a small part of the business.

Facing winding-up petitions from two creditors, Forrest was then placed into administration.

The FRP report also reveals that M&E contractor Proline, which itself toppled into administration because of non-payment of bills, was owed over £1m.

Other firms suffering big hits include: Surrey groundwork specialist O’Halloran & O’Brien, owed £1m; glazing contractor Evander Glazing and Locks, (£770,000); Oldham-based Heyrod Construction (£550,000), Bury-based Complete Walls Solutions (£550,000); and Manchester-based Mayo Civil Engineering (nearly £400,000).

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