Longcross creditors to get around 1p in the £1

Aaron Morby 8 years ago
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Trade creditors owed around £30m following the collapse of Longcross Construction are set to receive a meagre 0.4p-1.2p in the £1.

Administrator Deloitte said banks and preferred creditors to Longcross would be paid in full.

But it forecast a remaining pot of just £130,000 to £350,000 would be left to pay unsecured creditors.

In the latest creditors’ report, joint administrators Lee Manning and Matthew Smith, said their investigators had uncovered wholesale cash transfers to other group businesses prior to the firm’s administration on the 16 June.

On 4 June, the Longcross made payments of £564,000 and £226,500 to Longcross Fire and Security and LX Engineering (South) respectively.

But because the payments were made after a winding up petition was served two days before they were clawed-back under the Insolvency Act provisions.

Directors of LX Engineering (South) returned £429,000 and the directors of the Longcross Fire and Security returned the full payment.

These were used to directly pay down bank debt.

The administrators confirmed they were pursuing a legal claim for £1.16m made by Longcross against a subcontractor over remedial work needed in 2013 at the site of a former cold store.

Deloitte said it had run up costs of £955,272 so far because of the complexity of the administration but said it would only take around half the sum.

The administration will be extended for up to 12 months from June to recoup retentions, work in progress and handle creditor’s claims.

LX Engineering North continues to trade.

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