The administration process for one of the most high-profile construction firm collapses in recent times could drag on for “several years”, administrators have warned.
Administrators from Interpath Advisory, who were appointed to lead Tolent Construction’s administration process in February 2023, said “complexities” around retentions and construction milestone payments were causing the delay in settling the firm’s finances.
“We anticipate that further realisations in the administration will be from the group’s construction book debts,” Interpath Advisory said in its latest update on the administration process.
“[That will] include long-term contract debts where payment was made on completion of construction milestones, and retentions for construction clients,” it added.
“Due to the complexities surrounding the contracts and retentions, this process may take several years.”
Tolent, which was one of the largest contractors in the North East and had a £198m turnover in its latest accounts, collapsed in February 2023 owing around £76m. This was blamed on a series of major losses on a scheme in Durham and tightening credit conditions for its demise.
Administrators also revealed that they had appointed specialists from property and construction consultancy Gateley Vinden to assist in collecting Tolent’s debts.
So far, it has collected £1m from Tolent’s debtors, all of which has gone to IGF, its sole secured creditor and lender.
Construction News last year revealed that Tolent owed £4.6m to IGF, while the latest administration reports showed Interpath also paid out £625,000 in property asset sales to IGF. It is expected that IGF will be fully repaid what it is owed.
But the latest report said it was still “highly unlikely” there will be any dividends for any unsecured creditors, including the supply chain and its staff. Earlier this year, Unite the Union won an employment tribunal against Tolent, after the firm failed to inform the union that it was going under before it made more than 300 former employees redundant.
Interpath’s report also revealed that it was facing “ongoing legal claims” over the Tolent administration, and that Tolent’s former chief executive Paul Webster had been employed as a consultant to help with the claims. He has been paid £5,400 for his services, while law firm Clyde & Co has received £10,300 for its work on the unspecified legal claims.
In an interview with CN last year, Tolent founder John Wood called the impact of the firm’s collapse on its staff “tragic”, and that the firm had “some horrendous bad jobs”.
