Mason Lord owed its creditors £1.4m before its collapse earlier this year, an administrators’ report has revealed, with some trade creditors owed more than £100,000 each.
The company, which entered administration in August, owed around £1m to its trade creditors and £123,305 to its employees at the time of its collapse.
Administrators from Milner Boardman & Partners said that realisations from the company’s assets “should be sufficient to enable a distribution to unsecured creditors”, but was unable to confirm the likely amount each unsecured creditor would receive.
According to a statement of administrators’ proposals, trade creditors owed significant sums by Mason Lord include Gwn Dry Wall Systems, which is owed £138,765; Lancaster-based Askam Civil Engineering, owed £69,197; Keyse Construction, owed £41,507; and RAD Mechanical Services, based in High Peak, owed £35,825.
Mason Lord’s largest unsecured creditor is listed as a Mr M Miller, who is owed £243,723.
According to the administrators, Mason Lord entered administration after the exit of director Paul Barrow, who resigned from the company on 19 August this year.
Barrow is the former managing director of Paragon Construction Group, which entered administration in March last year, owing £2m to unsecured creditors.
Paragon’s assets were then sold for £15,000 in a pre-pack deal to Mason Lord in April 2016, and 30 of the contractor’s 40 staff were given jobs at the new company.
The administrators said Barrow “continued to support the business financially” following the deal, although cash flow “continued to be an ongoing problem as payment for works on a number of contracts was slow to be received”.
Mason Lord also sought external funders following its purchase of Paragon’s assets.
The administrators said that both Mason Lord directors – John Mason and Paul Barrow – decided that further funding for the business would be “provided by themselves personally”, with discussions between the directors taking place.
However, the administrators’ report added: “Before this could be formally arranged, Paul Barrow tendered his resignation as a director, leaving John Mason as the sole director”.
Following Barrow’s exit, Mason was “not in a position to provide further personal funds or arrange funding” for the company, leaving the company unable to continue trading.
The administrators were formally appointed on 25 August.
All but two of the company’s estimated 40 staff were made redundant on 29 August, with two employees kept on to collate financial information.
These two staff members were made redundant on 6 September following the completion of this work.
Mason Lord currently has three main contracts in progress, with the administrators looking to novate these to interested parties.