ICSM Construction Industry Insolvency News: director of collapsed firm ‘paid his mum £10m’ before the firm went bust
By Harry Mottram: A reoccurring action that takes place before a firm goes bust it that of sudden payouts as dividends and payments to the owners, directors or associates. Insolvency Insider have reported on the extraordinary findings of Geoffrey Rowley and David Hudson of FRP Advisory, the joint administrators of collapsed London construction company Henry Construction who are seeking some £30m pounds paid to relatives of the CEO Mark Henry. The administrators since they took on the work in June have accessed the firm’s electronic records and information and have started ‘a slew of claims against several parties connected to Mark Henry, a director of the company.’
The largest of the claims is against Mark Henry’s mother who appears to have come by £10m after cash from the firm was transferred via a holding company to ‘Elizabeth Henry (a minority shareholder in Holdings, a former director of Henry Construction and Holdings and the mother of Mark Henry).’ Money was transferred to the relatives, months before the firm folded in 2023 – but now some two years later have followed a paper and electronic trail to find what could be the real reason why the high-rise construction company Henry Construction went bust.
Ian Carrotte of ICSM Business Membership Group said it was not unusual for this ‘type of activity to take place ahead of an insolvency’ but was ‘an insult to creditors’ who would be left unpaid. ICSM understands that FRP Advisory are pursuing the amounts but they ‘are awaiting defences or amended defences on all of the claims. They also emphasise that there are other potential claims still being investigated that they have not disclosed due to their confidential nature.’
He said: “ICSM has many firms in the construction industry and it pains me to see from the administrator’s report that the subcontractors are owed more than £70,000. ICSM works to minimise bad debts for its members and to warn of late payers.”
Writing for Construction News - the trade publication website for the industry - Nichola Harley reported: "Henry Construction Projects has had its administration extended for another two years. It comes as administrators for the firm are taking legal action against both of its former directors, Mark Henry and John Noone, along with five of Henry’s family members, in a bid to recoup a total of £24.9m.When Henry Construction Projects called in administrators on 8 June 2023 it owed £43m to suppliers but held only £290,000 in cash."
The report can be read here: Report
Construction News' report is here: Construction News
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Ian Carrotte is the CEO of ICSM - a business membership group dedicated to preventing late payment and bad debts. Ian.carrotte@icsmcredit.com