A reputable building contractor with a history of successfully working on large-scale building projects for over 30 years was engaged on six projects at the time Court protection was sought, a number of which related to the provision of social housing units.
The issues faced by the company were:
- Low gross profit margin in a very competitive market
- Disputed claim on a project
- Losses on investment in development lands
- Unsustainable level of secured debt
The key risk for the company when entering the examinership process was the cancellation of contracts by clients as a result of the application for Court protection. Work had already ceased on a number of the sites due to the uncertainty surrounding the company’s future. However, the appointed Examiner, Mr Neil Hughes, was successful in negotiating with the company’s clients to ensure the continued operation of all viable contracts which the company was engaged on. This was subject to securing investment and the approval of a scheme of arrangement by the High Court. By eliminating onerous and loss-making contracts, the company was better positioned to focus on existing profitable contracts while also actively seeking to secure further work.
The examiner was successful in obtaining new investment and formulating a scheme of arrangement which was approved by the High Court, resulting in 24 jobs being saved while also agreeing a settlement in relation to the secured debt. This ensured the company returned to work on viable ongoing projects which is now allowing for the completion of much-needed social housing units.
