Administrators for collapsed Dundee building firm McGill are investigating the transfer of money and contracts to a “connected” business.
A new administrators report shows McGill Facilities Management Limited had debts of more than £5 million when it collapsed last August with the loss of 100 jobs.
The report also reveals administrators are investigating financial transactions, including why a Coronavirus business interruption loan was transferred to a connected company.
It is also probing payments made to McGill’s parent company, which until earlier this year was controlled by Graeme and Leanne Carling.
The report states: “A bank statement analysis indicated that McGill (Holdings) Ltd, previously known as United Capital Investments Ltd (name changed in December 2022) owed significant funds to the company.
“The joint administrators have received supporting statements from McGill Holdings Ltd refuting the outstanding balance.
“We are currently reviewing the position and a further update will be provided to creditors in our next report.
“Should we believe that sums are due to the company following our review, we will take steps to recover the balance in full.”
Several McGill investigations
It is one of a number of investigations ongoing by the administrators from Glasgow firm Leonard Curtis.
They are also probing why 20 McGill employees were never enrolled into the company’s pension scheme despite contributions being taken from their wages.
McGill is also being investigated for passing a contract to a connected company for no payment, and a high number of credit notes being issued – even after administrators had been appointed.
And the report, published at Companies House, also sets out “numerous issues” with the company’s debtor ledger.
A spokesman for McGill, which had its headquarters at Affinity House on Harrison Road, declined to comment.
McGill debts listed
The report sets out that the Dundee firm is due £1.9m due to HMRC.
There are also claims from preferential creditors – including former McGill workers – for £293,840. These will be paid before anyone else.
The report states that due to “significant issues” with McGill pensions, the preferential claims may be higher than first anticipated.
There is also debt to “unsecured creditors” which relate mainly to other businesses.
A previous report showed that had been estimated at £2,279,086 based on 199 claims.
However, the administrators have received 99 claims totalling £2,880,310.
The administrators’ fees also stand at £90,323.
However, the report, filed at Companies House, warns unsecured creditors may not receive any payment.
It adds: “There are insufficient net assets available, and it is considered unlikely that the administrator will enable a distribution to unsecured creditors.”
Pursuing ‘all outstanding balances’
The administrators raised £36,500 with the sale of McGill’s fire and security division.
They also recovered £238,223 from the sale of the company’s fleet of vehicles. A further £1,557 was collected from DVLA refunds of road tax.
A review of McGill’s books estimates a current debtor book value of £4.6m.
A full recovery has been deemed “very unlikely” and to date just £131,846 has been recovered.
The report states: “While some contracts were complete, the majority were incomplete and there was a number of retention balances outstanding.
“The joint administrators will continue to pursue all outstanding balances as long as it remains cost effective to do so.”
Second administration in four years
The firm previously fell into administration in January 2019. At that time, around 400 staff lost their jobs.
The McGill name and assets were purchased for around £1m by a company controlled by Dundee businessman Graeme Carling in March 2019.
In an interview with The Courier, Mr Carling estimated he lost £2.2m in the demise of the business.
The Carlings also own Central Belt heating firm Saltire Facilities Management Ltd, which recorded sales of £28.2m and a pre-tax profit of £254,000 in the year to March 2022.
Companies House also shows that as of January 25 this year, Mr and Mrs Carling are no longer “persons with significant control” of McGill (Holdings) Ltd, with Neville Taylor now holding the majority of shares.
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