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Wembley litigation pushes Cleveland Bridge into the red

Cleveland Bridge has announced a pre-tax loss of £17.7 million for last year, revealing it had to write off more than £18 million because of its long-running litigation with Australian developer Multiplex.

The report, filed at Companies House, showed the firm’s turnover fell from £27.3 million in 2006 to £26 million for the year to 31 December, 2007. It had, however, made a profit of £155,000 the year prior.

The statement said the £18.3 million “exceptional charge” had been made to the accounts “due to ongoing dispute resolution” with the Wembley Stadium main contractor.

In late September Construction News revealed CBUK would have to fork out more than £6 million to Multiplex in relation to overpayments, breach of contract and interest following a six-month hearing. This was in addition to its own legal costs as well as about £1.75 million of Multiplex's.

But both sides have filed applications to the Court of Appeal.

Cleveland Bridge told Construction News: "Despite best efforts to settle this case the parties involved have been unable to reach agreement.

"Regrettably we feel we have no option but to return to court to fairly resolve this dispute."

CBUK walked off the Wembley job in July 2004. It was later found that it doing so it had breached its contract.

Independent auditor Goodman Jones said: “Any future settlement of the litigation with Multiplex Constructions could result in additional liabilities of a material nature to the company.

“The validity of the going concern basis depends upon adequate financial support continuing to be available from the company’s ultimate parent, Al-Rushaid Petroleum Investment.”

CBUK said that despite a fall in turnover it had experienced “improved business activity” during the year and had increased its staff numbers by 55 over the period.