Hammer blow to hundreds of firms owed money by bust builders

The effect of Cardy Construction’s shock collapse has been laid bare as claims of £18m are made against the defunct firm.

Unpaid sub-contractors and staff left jobless are among the almost 1,000 businesses and individuals owed money by the city company, which faces liquidation within a year.

But despite claiming assets of £16.8m in accounts filed four months before it went under, administrators say just £2.9m is available to pay creditors.

The news strikes a hammer blow to hundreds of firms and tradespeople across the district, many of whom faced financial ruin themselves when Cardy collapsed in July.

Building work ground to a halt at numerous sites across Kent, including on the 539room student accommodation rising opposite the city walls.

Cardy faced an angry backlash, even employing security staff at its Wincheap headquarters following concerns for staff safety.

The company, founded in 1946, claims in documents released last week that a cash flow crisis sparked its downfall, caused by contractual disputes, delayed projects and failure to recover money it was owed on completed jobs. Arbitration claims, it says, totalled £3m.

Directors flew to Ireland for desperate talks with an Irish investor about taking over the troubled business, but they amounted to nothing.

Unable to pay its debts the directors of the company – Stuart Gremo, Chris Gremo, Michael Stannard and Lee Johnson – filed a notice of intent to appoint administrators. Student accommodation in Rhodaus Town, Canterbury, was one of the building projects halted by the collapse of Cardy; the firm’s HQ in Wincheap where it employed security staff amid fears of an angry backlash

Tunbridge Wells firm RSM – which charges as much as £560-an-hour – was appointed, and has so far racked up a bill of £125,906.

It held a meeting with creditors in the City of London last week, where it was agreed Cardy Construction, which turned over £77.5m last year, would be liquidated.

RSM press relations manager Frank Shepherd said: “We can confirm that the creditors meeting was held and that the administrators’ proposals were accepted by creditors, with the exception that a creditors’ committee was not established.

“The administrators will now continue in their efforts to realise assets for the benefit of creditors.”

The business had 13 live contracts when it went under, for clients including Rolls-royce, hotel chains and various education providers, ranging in value from a few thousand pounds up to £25m.

The contracts had a book value of £10.5m, with £1.9m owed to the firm by associated debtors, but agents predict as little as £481,000 of this is expected to be recovered.

With so little money in the pot, sources say unsecured creditors expect to recoup little more than 4p for every pound owed.

Among them are scores of local firms, some of which are owed six-figure sums.

Maidstone’s RKC Industrial Roofing and Cladding is listed as the biggest, with a claim filed for £513,236.

Employees, as preferential creditors, are due £165,274 in unpaid wages and holiday pay.

Were you affected by the Cardy collapse? Call 01227 475915 or email kentishgazette@thekmgroup. co.uk.