Contractors take £2.9m hit on Merepark collapse
MEREPARK Construction, the contractor which abruptly stopped its refurbishment of the Lewis’s building in Liverpool last month, went into liquidation owing trade creditors £2.9m.
The Altrincham-based business had the £26m contract for the work on the grade II-listed building as part of the £160m Central Village mixed-use scheme around Central Station.
Now creditors are urging liquidators at Begbies Traynor in Manchester to investigate the circumstances around the collapse which left total debts of £4.3m.
According to a letter issued to creditors following a creditors’ meeting last Monday, joint liquidators Paul Stanley and Paul Barber at Begbies Traynor in Manchester have been asked to investigate:
– The Co-op Bank’s role in the development of the Central Village
– The payment of a dividend in November 2012
– A full analysis of inter-company trading
– Whether a letter issued by the Co-op in April was an “indication of inducement to push creditors to keep working and further extend their credit to the company”.
A liquidation committee has been formed consisting of Mark Holden of Blackburn-based plastering business Red Rose Drylining, Lorraine Tate of Manchester-based Search Consultancy, and Phil Craven of Leyland-based Craven Mechanical Services.
Around 85% of the project is complete and hotel operator Accor opened its 126-bed Adagio aparthotel in the building at the end of March. It will also have 80,000 sq ft of offices. Begbies previously said the project was running 15% over budget and as a result the Co-op Bank stopped payments to subcontractors and suppliers.
The developer on the scheme is Lewis’s Liverpool LLP whose directors are Robert Ross and Richard Peel. They are also the shareholders of Merepark Construction, and other Merepark companies that continue to trade. Lewis’s Liverpool, owed £600,000, is now looking for another contractor to take on the work.
Merepark Group agreed a £37.1m forward funding deal with a Regent Capital syndicate to pay for the redevelopment. Co-operative Bank provided 10-year debt financing. Merepark’s spokesman declined to comment.
A spokesman for the Co-operative Bank said last month: “The Co-operative Bank and its borrower remain committed to completing the final stages of the scheme. Steps are now being taken to appoint a suitable contractor to complete the remaining work without any undue delays.”
Merepark declined to comment.
