Administrators for Henry Construction Projects say there could be sufficient funds to pay some of the £43m owed to its supply chain if legal proceedings are successful.
In their latest progress report, joint administrators David Hudson and Geoffrey Rowley of FRP Advisory said they were aware of more than 5,000 unsecured creditors that could recoup funds.
However, the level of payout hinges on the success of a £31m lawsuit FRP has lodged against six family members and former directors of Henry Construction.
“It remains the position that there may be sufficient funds available to pay a dividend to the unsecured creditors in due course, albeit this position may change subject to the success or otherwise of the legal claims on foot,” they said.
They said £67,000 owed to the firm’s 54 employees, who were made redundant in 2023, had now been settled.
HMRC presently has an outstanding claim against the firm for £1m.
When London-based Henry Construction Projects called in administrators on 8 June 2023 it owed £43m to suppliers but held only £290,000 in cash.
It was ranked 41st in the 2022 CN100 list of the UK’s biggest contractors, with revenue of £402.2m and pre-tax profit of £14m in its most recent published accounts, covering the year to 30 June 2021.
The firm is a wholly owned subsidiary of Henry Group Holdings Ltd (HGH), which was incorporated in 2016 and solely owned by Mark Henry.
HGH went into liquidation on 18 August 2023.
In a winding-up progress report for HGH in December, joint liquidators Kevin Coates and Robert Starkins from Grant Thornton UK Advisory said unsecured creditors were owed £141.15m and they were trying to assign some of the claims to Henry Construction Projects.
They said future realisations were unknown and will depend on the successful pursuit of the assigned claims.
In court proceedings being pursued by FRP, the administrators are alleging payments from Henry Construction Projects for a family home and relatives’ tax bills were made unlawfully and are seeking repayment.
A defence document filed with the court says the parties refute all accusations of wrongdoing. It argues that the payments were made in accordance with a legitimate intercompany arrangement.
The administrators’ claim alleges that the payments showed “a pattern of conduct by Mark Henry” to pay sums from his companies to “connected persons shortly before they entered insolvency”.
But the defence document says: “The defendants deny liability on all fronts.”