The administrators of collapsed Dundee construction services firm McGill are taking legal action to recover more than £400,000 they claim was transferred out of the business.
Owned by prominent local businessman Graeme Carling, McGill collapsed last August, causing dozens of job losses.
Since then administrators Barry Stewart and George Lafferty from Leonard Curtis have been tasked with maximising the return to creditors who are owed millions of pounds.
Summons served on United Capital
A “bank statement analysis” by the administrators has led them to conclude McGill is owed £442,602 by its parent company.
Before its collapse McGill was owned by United Capital Investments Ltd (UC), which was controlled by Mr Carling and his wife Leanne.
A new progress report states: “The joint administrators wrote to UC on a number of occasions seeking proposals for repayment of the balance outstanding in the sum of £442,602.
“No proposals for repayment were received, nor any evidence from UC that the sums we were pursuing were not due, despite requests.
“We then instructed TLT Solicitors to formally take steps to recover the balance outstanding.
“TLT then carried out their own reconciliation of the balance outstanding based on our evidence and wrote to UC seeking repayment of the outstanding sums. No response was received within the required timescale.
“TLT have subsequently prepared a summons which has been served on UC.”
United Capital response
United Capital provided a statement from former financial officer Kevan Sturrock in response to the claim.
He said there had been no communication between the administrators and United Capital in the last six months.
He said United Capital Investments is owed the most money from the McGill collapse. Graeme Carling previously put this loss at around £2.2 million.
Mr Sturrock said: “I am surprised and disappointed with the lack of progress that appears to have been made by the administrators in the last six months and the continued investigation into already satisfied questions.
“I have personally attended numerous in-person meetings, video calls, and have provided substantial amounts of information whenever asked.
“It is bitterly disappointing to read comments that we have not been communicating with the administrators.
“Neither I, nor any representatives of United Capital have received any communications from the administrators over the past six months so the comment that we haven’t responded is not a reflection of reality.
“I remain resolute that United Capital Investments holds the position as the largest creditor to McGill Facilities Management.
“Should I receive any further correspondence from the administrators or their representatives, the position will be defended vigorously.”
Administrators probe into other payments
The administrators are probing other payments made to companies connected to McGill, which they claim have been “preferred ahead of and prejudiced the general body of creditors”.
These are £24,398 paid to BlueLime Marketing and £87,060 paid to Affinity Business Centre, which is owned by Mr Carling.
TLT Solicitors is also trying to recover these funds.
United Capital note that BlueLime Marketing and Affinity Business Centre are both among the McGill creditors, owed £47,673 and £160,870 respectively.
The administrators have repeated a claim that a Coronavirus Business Interruption Loan payment received in May 2020 was “immediately transferred to a connected company”.
United Capital said: “This money was never taken out of the McGill group of businesses, rather it was moved to the group treasury account and transferred back as required, in the normal course of business. This was evidenced fully again in March.”
McGill debts
The administrators has raised £36,500 selling McGill’s fire and security division and £238,224 selling its fleet of vehicles.
Upon appointment they initially estimated the McGill debtor book at £4.6m.
However the report said that since then many of the debtors had “put forward documentary evidence of long-running disputes and complaints relating to the quality of the company’s workmanship”.
The expected recovery from debtors is now estimated to be £917,000. To date £164,779 has been received.
Meanwhile people and businesses owed money from McGill runs into the millions.
Preferential claims from employees who are due wages, holiday pay and pension contributions were initially estimated at £293,840 but “significant issues” with the company’s pension accounts means this is likely to increase further.
HMRC, classed as the secondary preferential creditor, has submitted a claim of £1.9m.
Bank of Scotland, which had a floating charge over the company, has put in a claim for £589,000.
A total of 347 claims from unsecured creditors have been made, which total just over £3m.
The administrators state it is “unlikely” there will be sufficient funds to pay the bank or unsecured creditors.
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