Administrators for Henry Construction Projects have launched a legal bid to recover £10m they claim was paid to a former director shortly before the firm went into administration in 2023.
Details emerged in an update report published on Companies House last week in which administrators from FRP Advisory said they had issued proceedings against “certain parties” to recover the money to help pay creditors.
The parties are not named, but court records show that proceedings have been commenced against Mark James Henry, Elizabeth Mary Henry, John Noone and parent company Henry Group Holdings (HGH). It is not known whether these proceedings are contested by the individuals.
Mark Henry remains an active director of both HGH and Henry Construction Projects, according to Companies House. John Noone is listed as an active director of Henry Construction Projects. Elizabeth Henry is listed as having resigned from her positions as director at both companies in 2020.
FRP’s report said: “The administrators’ investigations have revealed that the company paid £10m to its parent company, Henry Group Holdings Ltd on 19 January 2023.
“On 25 May 2023, shortly before the administration commenced and after the directors sought advice regarding formal insolvency options, [HGH] paid the £10m to a minority shareholder in [HGH] and a former director of the company and [HGH].”
Henry Construction Projects went into administration the month after this payment, in June 2023.
The administrators said they became aware of the unnamed recipient’s identity in June 2024.
FRP then entered correspondence that resulted in an agreement to ringfence the £10m “pursuant to agreed undertakings provided by the bank and the individual”, the administrators said in their report.
“Following the £10m being frozen, administrators issued proceedings against certain parties in order to recover the monies for the benefit of creditors,” the administrators added.
The report states that heads of claim include various provisions under the Insolvency Act.
“Litigation is ongoing and further updates will be provided in future progress reports.”
It is not known what the defendants’ position is in relation to the proceedings, and whether or not they contest the administrators’ claims. Construction News has approached the solicitors for Mark Henry, Elizabeth Henry and John Noone, who have not returned a request for comment.
Despite announcing an extension to the administration period, FRP still expects Henry Construction Projects to exit the process via company voluntary liquidation, as mooted last summer.
It added in the latest report that there “should be sufficient funds to pay a dividend to the unsecured creditors in due course”.
But FRP added that it was “currently not possible to estimate the level of distribution that may be made”.
HGH itself is in liquidation. In a progress report last month, liquidators from Grant Thornton said they were “currently considering recovery strategies” for potential claims and liaising with solicitors.
However, the liquidators’ report could give no further details due to the “sensitive nature” of the issue.
A spokesperson for Grant Thornton declined to comment further.
FRP also announced in its progress report that the administration period had been extended to 7 June this year, and that it is likely “that a further extension to the term will be required”.
Henry Construction Projects had a turnover of £402.2m and posted a pre-tax profit of £14m in its final accounts for the year to 30 June 2021. But the firm appointed administrators in June 2023, owing more than £40m to suppliers.
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Greg Pitcher