Mount Yard MeadowSide
Bardsley was on site for FEC on Mount Yard, Manchester

Payment disputes ongoing with Bardsley clients

Jessica Middleton-Pugh

Bardsley Construction collapsed in December owing £45m to creditors, according to an administrators’ report, and negotiations are still ongoing with developer clients over the payment of fees on prominent sites.

Tameside-based Bardsley Construction made more than 200 staff redundant when it collapsed. The company was established in the 1960s and had a head office in Dukinfield.

Joint administrators Steven Muncaster and Stephen Clancy of Duff & Phelps were appointed across Bardsley Group, Bardsley Construction and Bardsley Construction Holdings, and this week published their first report to creditors and statement of proposals.

The administrators put Bardsley’s turnover at around £80m, and said “the main reasons for the group’s failure was as a result of contractual issues in late 2018 on three major projects which negatively impacted revenues by £3.2m, ultimately resulting in trading losses of £2.6m.

“New work streams were slow, and although new projects were won, the gap in cash flow impacted on the balance sheet,” the administrators said.

The administrators said they had looked to sell the business, however “minimal expressions of interest were received for the business as a going concern”, as clients had taken back control of their sites. Duff & Phelps were “unable to accurately state” the level of creditor claims, but put the amount owed to unsecured creditors at £45m, while £13m was owed in loans between the three companies themselves.

A list of company creditors showed some significant figures owed including:

  • £1.12m to Salford-based Quartzetec electrical engineer
  • £910,000 to Ameon building services engineer
  • £580,000 to Plaster Plus Interiors
  • £575,000 to Semco UK electrical engineer
  • £445,000 to Aire Valley Architectural Aluminium
  • £390,000 to Sunnybank Plastering
  • and £375,000 to CLM Drylining.

The collapse has already started to impact Bardsley sub-contractors. Manchester glass firm Anders fell into administration this week after being owed £80,000 by Bardsley.

Blossom Street

Bardsley was nearing completion on Blossom Street for Mulbury

Plans to put the Bardsley businesses into voluntary liquidation would release “sufficient funds” to allow preferential creditors to be paid in full, Duff & Phelps said. Some payment is expected to be made to unsecured creditors, although the specific amount is unknown at this stage.

The contractor was on site with 11 design-and-build projects when it went into administration, with £11m owed, according to the report.

Projects included Mount Yard for Far East Consortium at Meadowside in Manchester city centre; elderly care scheme Albion Mill in Blackburn for Penmaric and healthcare developer VVHC; an apartment block for Mulbury Homes on Manchester’s Blossom Street; and a construction skills centre for Tameside College.

Not all of the contracts have been terminated, and in some cases Duff & Phelps is hiring sub-contractors to complete work.

While £1.4m has been paid by developers to Bardsley since December, the administrators are in ongoing negotiations with certain clients, including disputes over payments in some cases.

In Manchester city centre, Bardsley was building the 12-storey Mount Yard within FEC’s £200m MeadowSide. According to the administrators’ report, FEC have “reneged on a promise” to pay outstanding money owed, making “any recovery until the end of the defects liability period highly unlikely”.

However, FEC has strongly refuted the claim in the report: “FEC has contacted administrators Duff & Phelps to request that a correction be made to their Statement of Proposals to accurately reflect the facts of our negotiations with Bardsley and we look forward to that correction being made.

“We remain committed to protecting the jobs of those affected by Bardsley entering administration, having established our standalone UK construction business DEX Construction to re-employ eight Bardsley staff and the existing supply chain on our Mount Yard scheme at MeadowSide to ensure its completion on time this summer, with FEC ultimately focused on delivering a best in class development for Manchester.”

In Blackburn, client Penmaric paid Bardsley what was owed, but it since made an urgent court application to bring forward the timing of the handover of the site by four hours from 6pm to 2pm on Friday 10 January, resulting in what the administrators describe as an “extremely excessive” claim to pay £34,000 in court costs.

On Manchester’s Blossom Street, Bardsley was nearing completion on 143 apartments for Mulbury. While Mulbury has terminated the contract, the administrators’ report revealed Mulbury was disputing payment of £190,000 relating to a previous contract.

There are a few instances in which the administrators detail live projects which had been “overvalued”, with completion costs likely to outweigh any equity. This includes Go Develop’s scheme at Bleaklow Mill in Bury, “a difficult site with issues regarding levels and retaining structures”, and Tameside College.

To finish a StayCity hotel for CEPF on Mason Street, Manchester, and a 50-bedroom elderly care scheme for Southway Housing Trust, the administrators warned “completion costs and warranties are likely to be significant”.

Your Comments

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Some big numbers there for the small guys to swallow – hope they survive ?!

By Domino

CLM Dryling have unfortunately gone…
How these main contractors sleep at night I do not know…………..

By TOV

If Main Contractors didn’t make a routine habit on every valuation of inflating the value of the works completed on site and the materials being stored “off site” (ie, for another job), then a lot of these disputes between the contractor/client wouldn’t take place. There is no trust at all in these business relationships in the construction industry. Clients are extremely careful not to let contractors front-load these valuations in case they do go into liquidation at which point the client will never get those overpayments back.

By Anonymous

Something seriously wrong with the system.

By NC