Construction group collapsed with debts of £64m

A Lincolnshire-based construction group that filed for administration in December owed its suppliers £64 million at the time of its collapse, it has been revealed.

Three businesses under the Clugston Group umbrella collapsed late last year with 150 employees being made redundant.

At the time, Construction Enquirer reported that rumours of a “high level” of debt had begun to circulate after James Clark and Howard Smith of KPMG were brought in to oversee the running of the business, but the amount owed was then believed to be in the region of £40 million.

Now, the administrators have lifted the lid on the scale of Clugston’s debts, which are much more extensive than initial reports suggested.

A large proportion of the group’s debts were related to energy-from-waste contracts.

According to the administrators’ report, the “most likely” exit route for the company is now a creditors’ voluntary liquidation, which would at least see its unsecured creditors remunerated in some form.

KPMG is proposing to seek appointment as liquidators, which it says would “enable a distribution to preferential creditors.”

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