Ian Carrotte: the firm had been in trouble for some months with a big loss last year leaving suppliers high and dry
Dave Rogers in Building has reported on the doomed bid to rescue the collapse of the construction outfit Styles & Wood earlier this year.
As the company struggled to stay afloat investors in the words of Ian Carrotte of ICSM Credit “threw good money after bad” in a bid to save the ailing firm to the tune of £30m.
Dave Rogers reported: “Styles & Wood had more than £30m pumped into it last year as shareholders fought to keep the stricken company afloat. The company collapsed into administration at the end of February, ending 35 years of trading with the loss of more than 200 jobs.
Shareholders sank in cash
“A report by administrator EY says shareholders sank £15m into the business last May and a further £16m over a four month period between September and December last year. It added that the company’s main shareholder also stepped in with several guarantees for worried suppliers.”
Ian Carrotte said: “The firm took with them other related companies when they went bust owing £49m to secured creditors which was the bank and a finance firm. Typically it was the unsecured creditors who between them took a £21m hit.”
The administrators said they had been unable to sell the company as a going concern due to the debts and complex contracts. It meant more than 200 employees not only lost their jobs but were left unpaid when it collapsed.
Advice: 'pull out and lose work and not cash'
Ian Carrotte said: “Last year the company posted a massive loss which should always be a wake-up call for suppliers. During last year ICSM had feedback from suppliers that payment of invoices was becoming a problem. Our advice is to pull out of work when a company fails to pay contractors and suppliers regularly as it is sign something is wrong. It’s better to lose the business and the work than to end up owed thousands when a firm collapses.”
He said it was vital for firms to use ICSM Credit’s free temporary membership offer their free legal letters to chase invoices that were overdue.
ICSM Credit
ICSM Credit has more than four decades of experience as a credit intelligence group whose members gain inside information about firms in trouble allowing them to avoid bad debts and rogue traders. To join costs less than a tank of fuel - while at the moment there's a special free temporary membership offer during the Covid-19 crisis which gives access to free legal letters. ICSM also has an effective debt collecting service which has a global reach - ask for details from Paul.
For details about ICSM Credit call 0844 854 1850 or visit the website www.icsmcredit.com or email Ian at Ian.carrotte@icsmcredit.com on how to subscribe and to join the UK’s credit intelligence network to avoid bad debts and late payers. Follow ICSM Credit on FaceBook, Twitter and YouTube and Ian Carrotte on LinkedIn.
To keep up to date subscribe to the FREE ICSM Credit Newsletter to hear all the latest insolvency news and to see who has gone out of business click on the orange panel on the top left of the home page of the website www.icsmcredit.com or send an email to Ian.carrotte@icsmcredit.com
For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk