On Monday 15th January 2018, the UK’s second largest construction firm, Carillion, was placed in liquidation after running up losses on contracts and debts.
Carillion, who last year had sales of £5.2bn, employs around 20,000 people in the UK and 43,000 staff globally. As well as Carillion being awarded large private sector projects such as the HS2 high-speed railway, they are also one of the largest suppliers of service to the public sector, including hospitals, school and prisons.
It has been reported that the company has debts of around £1.5bn and owes money to between 25,000 and 30,000 firms.
The government have announced that they would only protect staff on private section work until Wednesday 17th January 2018. However, they will provide ongoing support for those businesses tied into public sector contracts.
The Official Receiver has been appointed by the Court as liquidator of Carillion and is now responsible for the day-to-day control and management of the liquidated companies in the group.
Our Head of Commercial Litigation, Alka Kharbanda, spoke to 5 News about the prospect of businesses recovering debts from Carillion. She confirmed that subcontractors are not in the priority list when a liquidator makes payments, unless they have security. The priority is normally banks and those who have security over assets. Subcontractors are in the pot with other unsecured creditors.
If your business was subcontracted by Carillion, and you are now worried about your business going forward, we can advise you on restructuring options. Please contact Alka Kharbanda on firstname.lastname@example.org or call 01494 478611.