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Administrators consider legal action over councils withholding payment forcing The Construction Partnership into administration

Administrators for a contractor that has been forced into administration say they have not ruled out legal challenges to two local authorities which have withheld payment on jobs. 

Matthew Fox, a partner at insolvency and restructuring firm CVR Global, has been appointed joint administrator of the The Construction Partnership after payment problems on two jobs forced the contractor under. 

The Construction Partnership was formerly trading as Ashe Construction (Southern).

The £11m-turnover contractor has offices in Southampton and Surrey and operates across London and the Home Counties.

It specialises in new-build, refurbishment and alteration work in markets including residential, education, health and commercial.

The firm has made 14 people redundant.

Mr Fox said the company entered administration after disputes with two local councils left it unable to pay creditors.

“This was a successful, profitable company which has delivered hundreds of schemes but disputes around projects delivered for two local councils left it with serious cashflow problems,” he said.

“This meant the directors had no choice but to appoint administrators. All its building projects have ceased and all staff have been made redundant.

“Typically companies in this sector have large networks of subcontractors and in this instance we believe that may number over 200 companies and individuals.

“We are currently investigating the possibility of further legal challenges over the two council contracts where payment has been withheld.”

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