Building firm collapses owing £1.7m and is left with just £10,000 to pay people back
- Credit: Archant
The directors of a building firm, which collapsed owing £1.7m, have already set up another company under an almost identical name, sparking anger from creditors.
Bespoke Norfolk Ltd, based in Hunstanton, went into liquidation at the start of May, with the directors, Ben Day and Stuart Deadman, blaming the impact of coronavirus.A document drawn up by the company’s liquidator, McTear Williams and Wood, has now revealed that once its 30 staff members have been paid, the construction firm has assets of just £10,000 left to cover £1.679m of debt, owed to more than 100 creditors.
Those creditors range from small, local firms to the taxman.
The biggest creditor is HMRC, which is owed £387,000 for the 2019/20 tax year.
Other large creditors include plant hire firms, construction suppliers and finance companies.
On April 20, 11 days before the company was put into liquidation, Mr Day and Mr Deadman became the directors and owners of a different company which then changed its name this Sunday to Bespoke Norfolk Group Ltd.
It is based on Campbells Business Park in King’s Lynn and lists its activity as property.
A creditor, who did not wish to be named, said they were concerned that this was an attempt to carry on under the Bespoke Norfolk name.
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The process of folding a company and then setting up a new one which continues its work is known as ‘phoenixing’.
‘Phoenixing’ is legal, but the Insolvency Service said anyone who is a director of a company which goes into liquidation cannot then manage another business with the same or similar name for five years, although there are some exceptions.
A creditor said: “To see them setting up a new company with almost the same name straight away is an insult.”
In response, the directors said the new company was “part of the overall strategy that they (the directors) might reduce the impact on some of the stakeholders during this pandemic”.
The liquidator’s document reveals that Bespoke Norfolk Ltd owes £680,000 to tradespeople, £55,000 to employees and £375,000 to another one of Mr Day’s and Mr Deadman’s companies.
Subcontractors are owed £131,000, while the bank is due £20,00 and credit card companies £31,000.
However the firm has almost no assets to pay anyone back, according to the document.
Matthew Body, from MB Plant and Civils in Sprowston, which is owed £26,000, said just before a letter from the liquidators arrived, he had been assured by the directors that he would be paid money owed.
In response, the directors said they had no record of this conversation so could not comment.
Mr Body said he became suspicious in March when the site was closed after efforts had been made to keep it running safely during coronavirus.
“It was a big contract for us, but we had an inclination that something was not right,” he said.
“They (the directors) were not very straight with us.
“They ignored phone calls and emails and they had promised us payment just before the liquidation.”
It is understood that Bespoke Norfolk Ltd was midway through projects in Hethersett, Ketteringham and Hockering before the liquidation.
But it is unclear what will happen to its construction sites.
The directors said earlier this week that the company had a “healthy” order book for this financial year. We asked the directors whether any of these jobs would go to their new company, Bespoke Norfolk Group Ltd.
They replied: “None of this order book mentioned has been carried over to the new company.”
In a statement, they added: “While the directors are very much saddened by the circumstances that have arisen and the consequences of those for everybody involved, following professional advice, the directors were faced with either instigating this themselves or it being taken out of their hands which would have resulted in further damage.
“It remains the hard truth that the business had no way of dealing with the consequences of the global pandemic.”
Bespoke Norfolk was started in 2013 by two carpenters who grew the firm into a multi-million pound business.
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