No cash found to pay former Midas staff and creditors

THE collapse of South West construction giant Midas is now expected to leave unpaid debts of about £60 million.

Administrators have revealed there is unlikely to be any cash to pay a huge number of unsecured creditors, including former staff owed hundreds of thousands of pounds.

A new progress report, filed at Companies House, shows the group of companies’ building arm, Midas Construction Ltd (MCL), has debts of more than £45m with hardly any cash to pay them.

It has already been revealed that debts of nearly £14m will go unpaid after the dissolution of the companies Midas Group Ltd (MGL) and Mi-Space (UK) Ltd (MSL). Exeter-headquartered parent firm MGL and its subsidiaries MCL, housing division MSL, Midas Retail Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd, all fell into administration in February 2022.

They blamed a toxic cocktail of Covid, inflation, money owed but not paid and cash-flow problems for causing the financial catastrophe.

Only MCL remains in administration as all the other companies have been dissolved. But it has the bulk of the debt and administrators at global business advisor Teneo Financial Advisory Ltd are warning unsecured creditors are likely to receive hardly anything.

In their new report, administrators said they have received 219 claims totalling about £392,000 from preferential creditors of MCL – that’s employees owed wages, holiday pay and pension contributions.

But they say “it is unlikely these claims will be paid in full”.

The administrators also expect there to be no cash to pay HM Revenue and Customs about £1,520 it is claiming in unpaid taxes.

The bulk of the debt is owed to unsecured creditors. So far, 359 unsecured creditors are claiming more than £45m. The report said there was a “remote possibility” some money would be available to pay some debts.

This would be from cash due to Midas from unfinished and disputed contracts, which amounts to some £60m, but which are disputed and subject to legal challenges, including counter-claims.

The administrators stressed: “It is unlikely sufficient funds will be realised to enable a distribution to be made to unsecured creditors.”

A secured creditor, Lloyds Bank Plc, has already been paid in full because its debt was guaranteed.

HMRC has already lost more than £3.5m in unpaid taxes, and 150 unsecured creditors were left owed £10.2m from the dissolution of MGL and MSL.

MCL is still in administration and Teneo has had it extended until February 2025 by court order.