Directors’ new company buys failed firm

Three directors of an Essex-based contractor that has gone into administration have launched a new company that has acquired the failed business and its assets.

Groundwork specialist Colwin Construction appointed administrators from Leeds-based Lewis Business Recovery and Insolvency on 19 March.

However, the firm and its assets were acquired by newly launched company Colwin Group for £70,000, according to a report released this week by Lewis Business Recovery.

The deal was completed on the same day the administrators were officially appointed. Three men – Ben Meagher, John Howell and Trevor Schofield – are listed as directors of both firms on Companies House. “The purchaser is considered a connected party by way of mutual directors,” the report said.

Only one offer was received for Colwin Construction and its assets, according to the administrator’s report.

Lewis Business Recovery was “initially engaged” by Colwin Construction on 18 February.

Colwin Group was incorporated on 14 March, according to Companies House records, and has the same trading address as Colwin Construction.

Sixteen out of Colwin Construction’s 19 staff transferred to the new company through TUPE, the administrators report said.

A total of 162 creditors are listed with the total amount owed nearly £3.7m.

The administrators report showed Colwin Construction owing HMRC nearly £800,000, which includes unpaid VAT and unpaid employees’ PAYE and National Insurance contributions.

The report added that based on current estimates, it is anticipated there will be a distribution to “preferential creditors”.

It said: “The quantum and timing of any distribution will be confirmed with creditors in the next required progress report.”

HMRC is a secondary preferential creditor.

Unsecured creditor claims are estimated to be around £1.7m.

However, the administrators report said that “based on current estimates, there will be insufficient funds to enable a distribution to the company’s unsecured creditors”.

Colwin Group’s website lists its specialities as underpinning, superstructure repairs and home improvements.

The administrators have been contacted for comment.