Collapsed contractor Mason Lord has had to pay out £122,000 to settle a claim with a former employer, while its unsecured creditors, some of whom are owed six-figure sums, are yet to receive any funds, according to the company’s administrators.
According to a progress report from the company’s administrators Milner Boardman & Partners, no payments to unsecured creditors have been made, but the administrators said realisations from the company “should be sufficient” to make a distribution.
However, it is not yet known how much these creditors, some of whom are owed more than £100,000, will receive, with payouts dependent on how much administrators can realise from the company’s assets.
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.
In total, the company was estimated to owe £1.4m at the time of its collapse, and the administrators said they had received claims to date of £1.3m.
These claims include a combined £438,000 from former director Paul Barrow, and the company’s current director John Mason.
The progress report also revealed Mason Lord had been embroiled in a dispute with one of its employers following its administration in August last year.
One of the company’s employers claimed it had paid Mason Lord around £244,000 for the supply of materials before its administration, but said these had never been supplied. This was disputed by Mason Lord, and the administrators appointed solicitors Freeths to examine the claim.
At the time of its administration, Mason Lord had £169,000 cash at bank, and this was subsequently topped up by Barrow, who made payments of £75,000 into company’s account.
The case was due to go to court last October, but a settlement was reached between the administrators, the employer, and former director Paul Barrow, which said £122,000 would be paid out of Mason Lord’s cash-at-bank to the employer, leaving around half that left over in the company’s bank account.
The company has also received a VAT refund of £104,000 since its administration. According to Mason Lord’s statement of affairs, published last October, it had hoped to realise around £150,000 from its assets, cash, and contracts in progress.
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 2016, 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, and all of the company’s staff were made redundant by September last year.