McInerney Homes in administration

The Wigan-based housebuilder has appointed Richard Heis, Brian Green and Paul Dumbell of KPMG as joint administrators to seven companies within the UK arm of the group.

The seven companies in administration comprise of the McInerney Group, McInerney Homes, Alexander Developments North East, Lancing Homes, Gold Homes The Wave, William Hargreaves and Bowey Homes.

Richard Heis, restructuring partner at KPMG, said: "The economic downturn, particularly in respect of the UK residential property market, has had a severe detrimental impact on the Group's cash flow therefore limiting its ability to trade without substantial additional finance.

"Our overriding objective is to ensure that work on the majority of the live private development sites is able to continue in order to maximise value in the interests of all the creditors. We are therefore delighted to have assisted in establishing the agreement between Ludgate Hill Developments Limited and a major housebuilder to build out these sites. This should assist us in ensuring continuity as far as possible to the customers and suppliers alike."

Between them, the seven companies employ a total of 161 members of staff and are responsible for 32 private development sites across the UK, together with a number of social and commercial housing development projects.

KPMG said the joint administrators intend to transfer a number of the private development sites to a solvent entity within the group, Ludgate Hill Developments, to allow these sites to be developed with the aim of "maximising the return to creditors following consultation with employees".

The joint administrators have also agreed a second deal in principle with a number of the former McInerney Homes management team to acquire the social housing business, with completion subject to a number of conditions.

There have been 14 redundancies upon appointment of the joint administrators in respect of the William Hargreaves commercial contracting employees.

The administrators are now conducting a consultation process with the remaining employees in accordance with TUPE legislation for each of the potential business transfers. This process is estimated to last for a period of two weeks.

McInerney Homes has additional offices in Durham, Leeds, Wolverhampton and Northampton and development sites around the North East, North West, Midlands and Yorkshire.