J Tomlinson’s unsecured creditors miss out after contractor’s collapse

New documents on the collapse of building contractor J Tomlinson reveal administrators have collected £3.3m since their appointment, but confirm unsecured creditors will miss out.

The collections included £1.1m from work which had not been invoiced before the contractor failed last July, with the loss of nearly 400 jobs.

The collapse of J Tomlinson had left more than 1,000 creditors owed £33m while public sector contracts worth £236m were affected by the company’s failure.

J Tomlinson was headquartered in Beeston and had bases in Sutton Coldfield, Kirkby-in-Ashfield, Wigan, Derby, Sheffield, Doncaster, Wakefield and Bulwell, Nottingham.

Joint administrators Raj Mittal and Nathan Jones of FRP have confirmed their initial position that “the company has insufficient property to enable a distribution to be made to unsecured creditors”.

IGF, a secured creditor, has been repaid the £600,000 plus VAT it was owed, while former employees, who are classed as preferential creditors, will be paid the £613,000 they are owed in unpaid pay, pension contributions and holiday pay.

HMRC was owed £5.3m and will receive a dividend, although administrators have not yet put an estimate on the total.

It continues to chase debtors, including an unnamed director who still owes the company £50,000.

Mittal and Jones were appointed joint administrators last July and decided that “continuing to trade would not be a viable option due to the high level of overhead costs, support that would be required from sub-contractors and resultant level of funding required”.

367 staff were made redundant immediately, and 25 staff initially retained have also had their employment ended.

The £94m-turnover company struggled because of “hyper inflation” on long-term contracts that were priced pre-Covid.

It made significant losses on major contracts, including £1.3m on a contract to build student accommodation and £2.5m on care sector construction projects. It also had to pay £2.7m to Worcestershire County Council after an adverse result of an adjudication in relation to the construction of a school.

The administrators acknowledged that wind-down costs “significantly exceeded” their initial estimate, due to the “complexity” of the work required. There were 900 boxes of paper records holding customer contract information that had to be inventoried while the company’s IT servers had to be relocated.

They expect to need to extend the 12-month period of administration and plan to take the necessary steps nearer the end of the initial period, which runs until July.