Connaught hotline open for subbies owed cash

Grant Prior 13 years ago

A hotline has been set up for subcontractors and suppliers owed cash by Connaught.

Staff from administrator KPMG will be manning the phones from this morning to talk suppliers through what happens with unpaid bills.

Connaught has a 10,000 strong workforce but still employs an army of trade contractors on its maintenance jobs across the country.

Subcontractors fear they will not get paid for work carried-out for Connaught when the jobs are sold-on to a new main contractor.

One worried trade contractor told the Enquirer: “We’ve all had our fingers burnt before by firms going into administration so it’s obviously a real worry.

“It’s not clear yet what will happen with Connaught contracts but my past experience has been that debts are often dumped when contracts are sold and the people who suffer are the subbies who are expected to work for the new main contractor but not get paid money they are owed by the previous one.

“This could have a massive impact on the industry because of the size of Connaught.

“I can see us not getting paid for that work and just being expected to suck it up and get on with working for contractors who take over the jobs.”

Legal experts are advising subbies to check their contract terms with Connaught to decide the best course of action.

Frank Bouette, Associate as Thomas Eggar LLP, said: “The collapse of Connaught is likely to have wide-spread ramifications for the construction industry and contractors employed by the company  may find themselves without fees and fighting to safeguard their own future.

“What these contractors need to do now is primarily keep their ear to the ground for word on who will be picking up these projects where Connaught has left off in order to put themselves forward to finish the work.

“Simultaneously, they must conduct a review of the termination and protection clauses within their contracts to decide whether to terminate them and do what they can to recover any stock and goods supplied.”

Mark Clinton, Partner, Thomas Eggar LLP, added: “If they have credit insurance, contractors should also speak to the providers of that insurance about whether or not it will pay out.

“Of course, the availability of such insurance has been very restricted in recent times. Connaught’s clients will also be looking at their termination provisions and security.

“Contractors may want to look at any performance bonds put in place when they entered into the contract with Connaught to determine whether they can call upon those bonds to recover any losses they suffer.”

The dedicated helpline can be reached on 0844 770 1304.

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