About 150 trade creditors of Murray and Burrell left more than £800,000 out of pocket between them when the Galashiels building company went into administration in November now look set to have their claims settled in full – but only once the firm’s assets have been sold off.
The 38 employees of the family firm left out of work after it went under are being deemed preferential creditors in terms of their wage arrears and holiday pay, and they are due to get nearly £34,000 between them.
And as ordinary creditors, their claims for £180,000 in redundancy and in lieu of notice payments are also anticipated to be settled in full.
That is the upbeat forecast being made by Richard Gardiner, of Fife-based chartered accountancy firm Thomson Cooper, appointed as administrator in November.
In that role, Mr Gardiner has contacted Murray and Burrell’s unsecured creditors, mostly small Borders businesses, after they put in claims, and they have now agreed to his proposals for recouping their money.
In his report, due to be posted on the Companies House website later this week, Mr Gardiner reveals the Roxburgh Street company had total liabilities of £1.85m, including inter-company loans and money due to HM Revenue and Customs.
He said the sale of the company’s assets, including land and equipment, was estimated to realise £2.47m.
Mr Gardiner explains that rescuing the company as a going concern was not an achievable option given the “considerable ordinary creditor liabilities”.
“It was also acknowledged that the directors – Michael Burrell, his wife Marguerite and their daughter Sally Kemp – did not have an appetite to trade the business,” he states.
“Accordingly, the purpose of the administration is to achieve a better result for creditors than would have been obtained through an immediate liquidation of the company.”
Mr Gardiner says he anticipates that the single secured creditor, lender Assetz Capital, owed £658,000 by the firm, will be paid in full under the security it holds over three areas of company-owned land and that the preferential creditors – Murray and Burrell’s workforce – will also be paid in full.
And provided the sale of assets at the values estimated by the directors can be achieved, he “anticipates that a dividend of 100p in the pound will be available to the ordinary creditors”.
His report concludes that once the objective of securing the best deal for creditors has been achieved “the most cost-effective way of paying a dividend to unsecured creditors would likely be for the company to be placed into creditors’ voluntary liquidation, following which the liquidator will make the relevant distributions prior to dissolving the company”.
The creditors with the biggest claims against Murray and Burrell are two firms also said to be based at Roxburgh House and also including Michael Burrell and Sally Kemp among their directors.
Called ASM Developments and Waukrigg Developments, they are said to be owed £564,844 and £231,530 respectively.
Others with claims against the failed builder include Galashiels roofing firm Finlaysons, owed £73,134, and Newtown electrical contractor Jack Hunter, owed almost £39,000.