Wrekin Construction collapse shocks debt recovery expert
The debt recovery specialist dealing with the aftermath of the collapse of Shropshire property firm Wrekin Construction has said he has been amazed at the scale of the disaster.
And he said there were still people getting in touch every day looking to recover money from the failed firm.
Wrekin Construction was taken into administration last Monday after its bank was presented with several winding up petitions from unpaid creditors.
It was later revealed that the company had sold 11 million shares in the company in exchange for a ruby - allegedly valued at £11million - described in its accounts as the “Gem of Tanzania”.
On Sunday, a convoy of former workers descended upon the Wrekin Construction headquarters in Shifnal, to protest at the way the collapse of the company had been handled. There was initially a huge amount of anger when the company went under, with the banks blamed for destroying a company that still had an order book worth hundreds of millions of pounds.
The creditors were represented by Darren Davoile, a debt recovery manager with Coventry-based insolvency law specialists Coltman Warner Cranston. He had represented 20 creditors owed £1.3 million between them when he presented the winding up petition to the Royal Bank of Scotland.
He said there had been a “vast” reaction to the collapse of the company, adding: “Every day we are getting correspondence from solicitors asking ‘can we jump on?’”
He claimed that if the bank had continued to support Wrekin, the business may well have survived the recession, adding there had been a huge knock on effect of the collapse.
He said: “We’re not always talking small amounts. Some of the companies on the petition were owed between £50,000 and £70,000 – enough to threaten their own businesses.
“If we hadn’t presented the winding up petition someone else would have. It was just a matter of time.
“The tragedy is that it was all so unnecessary. If the bank had used taxpayers’ money the way it was intended, and offered financial support to a good, well-run company that had been in business for the best part of 50 years, Wrekin could have paid its creditors what they were owed and my clients would now have less to fear for their own futures.”
Hundreds of former Wrekin workers joined the protest just a week after 420 people lost their jobs. Most of the workers there were made redundant about 24 hours after the company collapsed, with just a skeleton staff retained at the headquarters.
The workers met at a service station on the M54 in Telford before driving to the headquarters in a convoy.
Ernst & Young said the company had tax liabilities of over £3.5m and was due £2m from government contracts at the time of announcing the job cuts last week, and was the subject of about 40 county court judgments.
Mystery still continues over the whereabouts of the so-called “Gem of Tanzania”.
The firm said it had been valued and certified by an Italian institute when they took possession of it but the institute said it had no record of the gem and Wrekin managing director Peter Greenwood has since admitted to a trade magazine that he had never actually seen the ruby.
