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Muirfield Contracts directors could face court action

Muirfield directors are subject to a confidential report to the Insolvency Service.
Muirfield directors are subject to a confidential report to the Insolvency Service.

The directors of Dundee building firm Muirfield Contracts could face legal action over the collapse of the company that faces claims from unsecured creditors of more than £10 million.

Administrators Campbell Dallas have submitted a confidential report on the conduct of the directors including Thomas John Stodart to the Insolvency Service.

A spokesman for the service said that report would remain confidential until or unless action is taken.

That action could include disqualification of the directors or proceedings against them in court.

Muirfield was sold in May 2013 by Maurice Mackay to Ensco 395 Ltd after which Thomas John Stodart was appointed board director and joint chairman.

The company, a major presence in the east of Scotland construction industry, collapsed on March this year with the loss of almost 300 jobs and went into administration.

Mr Stodart blamed the demise on inheriting loss-making contracts, overstatement of previous profits and other reasons.

In the year to October 2013, however, the company made a pre-tax profit of about £1m from a turnover of £48m and had net assets of £9.2m.

In May, Campbell Dallas accused Mr Stodart of not giving a full picture of Muirfield’s financial position.

In his progress report on the administration published on Monday, Derek Forsyth of Campbell Dallas said Muirfield’s plant, motor vehicles and furniture had been sold for about £400,000.

Debtors owed the firm £7.46m from 433 balances, but it could take until 2017 before final sums can be settled.

A Muirfield property in Alyth had been sold for £55,000 but another in Friockheim has yet to go on the market.

A site in Aberdeen could fetch about £400,000.

Muirfield had cash-backed performance bonds for four contracts with a balance of £1.23m held on account.

Other debtor balances were due to Muirfield from Ensco 395, Torridon Trading and Vasanat International, previously stated at £10.776m, £1.2m and £443,000 respectively.

Mr Stodart had been a director of Ensco 395 and Torridon Trading which are now subject to insolvency processes.

There are legal proceedings to recover the Vasanat debt.

He anticipated the preferential creditors, including amounts due to former employees up to certain limits, should be paid in full and a second ranking floating charge creditor had made a valid claim for £1m.

Unsecured creditors companies that provided goods and services to Muirfield have submitted 1,246 claims amounting to £10.2m but Mr Forsyth said the final total could be significantly higher.

It was too early to say how much of a dividend they would receive.

Mr Forsyth said it would be at least two years from the date of administration of March 2015 2017 or longer for the assets to be realised and claims settled.

Muirfield is to move from administration to creditors’ voluntary liquidation.