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Nearly 100 jobs gone after ‘catastrophic’ cashflow loss forces Bay Construct into liquidation

Nearly 100 people have lost their jobs after “catastrophic” cashflow losses following a contract dispute forced Bay Construct into liquidation.

Liquidators RSM Restructuring Advisory said Bay Construct directors sought to resolve the issue but were left with no other option but to close the business, resulting in 95 redundancies.

Keith Marshall and Gareth Harris of RSM Restructuring Advisory were appointed joint liquidators of the group on 3 October.

RSM was appointed over BDO Leeds, which was listed as the intended administrator in the contractor’s notice of intent to appoint administrators on 1 September, as revealed by CN.

The £35m-turnover company was created just over five years ago in 2011 and it has four directors listed at Companies House: managing director Paul Sanderson, group operations director Andrew Peacock, divisional director for Leeds John Currie and divisional director for civils Steve McNulty.

Mr Sanderson and Mr Peacock are also listed as directors for a separate construction equipment company, the name of which was changed to Sutro Construct on 18 October – 15 days after the liquidators were appointed.

The company was previously called Sutro Plant.

RSM Restructuring Advisory was unable to comment on Sutro Plant’s change of name to Sutro Construct.

Bay Construct specialised in construction and fit-out projects ranging from £1m to £6m and ran into difficulties on the multi-million-pound Cumberland Hotel development in Hyde Park for client London & Regional.

RSM said that, as result of the dispute, the company suffered a “catastrophic” loss of cashflow that hindered its ability to continue to trade “given the lack of resources and time to challenge the actions of the client”.

As a result, Bay Construct was closed on 13 September 2016 by the directors and all employees were made redundant.

Their claims are being dealt with by the Redundancy Payments Service.

Mr Marshall said: “In recent months, we have seen an increase in disputes between clients, main contractors and subcontractors on large-scale construction projects across the sector.

“In the case of Bay Construct, while attempts were made to stabilise operations and seek to resolve the dispute, the impact spread to other contractors who failed to pay, and the directors were left with no option but to close the business, resulting in 95 redundancies.”

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