Supply chain and other unsecured creditors are set to receive nothing from collapsed steelwork specialist Killelea, its administrators have said.
The Lancashire-based firm was owed £509,000 when it went under 18 months ago, according to the latest update from administrators Leonard Curtis.
Killelea, which had been in business for 53 years, announced its intention to cease trading after turnover plummeted and financial losses were recorded in its last two sets of accounts.
In their third progress report, joint administrators Mike Dillon and Andrew Poxon said that while over 86 per cent of the sums owed to Killelea had now been recovered, there would be little cheer for unsecured creditors.
“At present, it is considered unlikely that there will be sufficient funds available to enable any form of distribution to unsecured creditors,” they said, while urging creditors to continue to submit claims in case that position changed.
However, preferential claims from former Killelea employees for wages and accrued holiday pay and pension contributions are expected to be settled in full.
The firm employed 85 staff, all of whom were made redundant when Killelea stopped trading.
HMRC, deemed a secondary preferential creditor, was also likely to see its claim paid in full, while Lonsdale, which provided cashflow support to Killelea, was regarded as a floating charge creditor and would receive a dividend that is still to be determined.
“The objective of the administration is to realise property in order to make a distribution to one or more secured or preferential creditors,” the administrators said.
“It is anticipated that the objective will be achieved as a dividend is expected to be paid to the preferential creditors, secondary preferential creditor and floating charge creditor.
“The timing and quantum of the distributions to be made is dependent upon the level and timing of remaining asset realisations and the associated costs and expenses.”
Killelea was founded in 1970 by James Killelea and his son, Robert.
Its latest accounts for the year ending 31 May 2022, published before the firm’s collapse, showed its turnover had halved to £11.4m from £22.7m the previous year.
It said it had incurred significant costs on one of its large contracts.
As of February 2023, it said it was in formal negotiation over design variations to the contract, which “fundamentally affected the overall project and the costs involved”.
The firm also reported a drop in orders, which hit its turnover. Its forward-order book included a £3.2m office block and car park in Stockport, a £3.8m car park in Stoke and a £3.1m car park in Guildford.
The period of administration is expected to run until 17 October.