The collapse of South West construction giant Midas means almost 2,000 other businesses in its vast supply chain are unlikely to receive a penny of the cash they are owed.
Administrators have already received claims for £22,091,980 from unsecured creditors but have warned the final total might be even higher.
The list of creditors owed money when Exeter-headquartered Midas Group hit the buffers has already surpassed 1,700 and includes small and medium-sized companies claiming anything from a few hundred pounds to six-figures sums.
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Although Midas was mostly involved in construction schemes in the South West, the claims are from companies based around the country, including as far as Northern Ireland.
But a great many are in the West Country and they face the prospect of receiving no cash at all when administrators either dissolve or liquidate the Midas companies, as is expected.
Midas Group Ltd and its subsidiaries Midas Construction Ltd, Midas Retail Ltd, Mi-Space (UK) Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd all fell into administration in January 2022 blaming a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash flow problems for causing a financial doomsday.
Administrators at global business advisory firm Teneo Financial Advisory Ltd have revealed Midas had net assets of £7,475,000 at the end of October 2021, including owning the freehold of two buildings, in Newton Abbot and Newport, worth £2,465,000 and £150,000.
But this money will not cover the vast number of claims that have come in from businesses which had done work for Midas but not been paid.
The largest bill is for £1,306,000, owed to Lloyds Bank. But as a secured creditor, the bank is expected to get its money due to having fixed charges over properties
Preferential creditors are also likely to receive at least some of what they are owed. There are 267 of these creditors, owed a total of £482,000.
Teneo expects the 44 owed a total £91,000 by parent firm Midas Group Ltd, to get all their cash, but the remainder, owed money by Midas Construction and the housing division Mi-Space will have to wait and see what funds the administrators can claw back from businesses that owe Midas cash.
The taxman will also have to wait and see if a bill of more than £5m in unpaid taxes will be settled. HM Revenue and Customs is short of about £2.5m for unpaid VAT. It is also owed in respect of PAYE, student loan repayments, employee national insurance contributions and Construction Industry Scheme taxes of £773,000 from Midas Group, £1,661,000 from Midas Construction and £431,000 from Mi-space.
Administrators said they anticipate that there may be sufficient funds to enable payments to be made against these claims, but again it would depend on what can be collected in.
However, there is little hope unsecured creditors, the vast bulk, will see any of their money. Teneo’s report filed at Companies House reveals Midas Construction owes £19,265,000 to 1,372 unsecured claimants.
Mi-space is facing 307 claims totalling £2,543,000 and Midas Group Ltd has 90 claimants asking for a total of £262,000. Even Midas Retail owes £22,000 to seven claimants.
Among a vast list of companies, including some with multiple claims, wanting money from Midas Construction is Exeter-based law firm Ashfords LLP, short of £106,619.
Other notable claims include £170,241 from Fred Champion Groundworks Ltd, in Liskeard; £141,999 from Maybe Hire Ltd, in Truro; £265,032 from Imperial Facades Ltd, in Plymouth; and £74,758 from BCL Groundworks in Bridgwater.
Among multiple claims, Exeter’s Totus Engineering Ltd is owed more than £114,000; Progressive Systems Ltd, also in Exeter, is claiming more than £160,000; more than £140,000 is claimed by MA Witcombe Ltd, trading as MBA Consulting, in Truro; DNS (South West) Ltd, in Roche, has nine claims coming to more than £340,000; and about £100,000 is owed to the LTC scaffolding group in Plymouth
One of the largest single claims is for £473,614 from electrical contractors Highadmit Project Ltd, in Bristol.
However, Teneo stressed the list does not include a number of other unsecured creditor claims which are expected, including any unsecured element of any employee claims and/or pension deficit, plus a number of intercompany creditors and amounts due under guarantees crystalised by the insolvency of other group companies.
The administrators said: “Consequently, we anticipate that the total value of unsecured claims could be materially higher than the total given above once these other liabilities have been quantified and included.”
And they added: “On present information it is unlikely that sufficient funds will be released to enable a distribution to be made to unsecured creditors in any of these companies.”
