The collapse of GB Building has left subcontractors £39 million out of pocket, according to the administrator’s report published two months after the company’s crash in March 2015. Administrators BDO have also suggested that affected subcontractors are extremely unlikely to ever see a penny of their money paid back.
Following the collapse of GB Buildings, subcontractors working on over 40 sites across the UK were left without payment for dozens of projects undertaken across the country. GB’s fiscal disaster has turned its supply chain into a house of cards, with numerous affected subcontractors crumbling and entering administration as a result of non-payment.
In Stockport, pre-cast specialist SCC missed out on a £1 million payment for their work on the Leeds Hilton project. With the debt unlikely to be paid, the company has been forced to enter administration.
Meanwhile, in Leeds, civil engineering firm McFadden Construction lost out on a £700,000 payment, also for their work on the Leeds Hamilton project. This again pushed the subcontracted firm into administration.
Not enough in the kitty
The seeming impossibility of repayment for subcontractors stems from GB Building’s dire financial straits. With administrator BDO already carving up the carcass of the company, it appears that there will not be enough to repay Lloyd’s Bank £6.5 million, let alone reimburse subcontractors further down the pecking order. Administrators must attempt to dispense:
- £18 million to performance bond underwriters
- £6.5 million to Lloyds Bank
- £30 million to unsecured trade contractors
- £9 held in retentions
What are your thoughts about GB Building’s collapse? How can the industry prevent this from happening again? Have you ever been left short by a failed company? Share your experiences and opinions below.