Administrators tell creditors including Mitie and Lorne Stewart that company records are in a poor state.
Failed fit-out contractor Churchfield has debts of £7m, the firm's administrators say in their report to creditors.

The lion's share, £5.3m, is owed to trade creditors, including subcontractors Mitie Engineering Services London and Lorne Stewart (see box).

The contractor, which had a turnover of £38m, entered administration in February. Initial estimates put its debt at £5m.

Creditors claim that the figures compiled by joint administrators Rothman Pantall and Deloitte & Touche, underestimate the total debts. One said: "In our case, the figures are wildly wrong. I've spoken to four others in the same position." The receivers are legally required to send a report on the firm to interested parties in advance of the creditors' meeting, which is due to be held next week.

It states: "The company's record were found to be in a poor state and, consequently, it has taken longer than anticipated to catalogue the relevant information and at present it is not possible to provide a more accurate prediction of the realisable debtors." Creditors say they expect the administrators to wind up the company, given its financial position.

The firm's assets stand at £6m but the administrators say they expect to recoup only £575,000.

The report confirms that the role of Churchfield's directors was being examined. It states: "As part of their statutory duties, the administrators will consider the conduct of the directors in the course of the company's failure." The accountants say they will work with a creditors' committee in this investigation.

The firm's debts also include £1.8m owed to sister company Churchfield Associates West and smaller debts to the Inland Revenue and Customs & Excise.

The report confirms that Churchfield was involved in a dispute over a flat refurbishment contract in Butler's Wharf, near Tower Bridge in central London.

This wrangle, and another involving an £8m contract, both contributed to the firm's calling in administrators, says the report.

The administrators say the firm suffered a dramatic worsening in its fortunes between 1998 and 1999, moving from £1.6m operating profit in 1998 to a £1.7m operating loss in 1999 (both calendar years).

Churchfield directors mentioned in the report includes former group managing director Martin Tidd, who left last autumn.

Other directors listed include Steven Baldock, Eric Smith and James Smith.

Churchfield’s main creditors

  • Mitie Engineering Services London – £456,521.87
  • Lorne Stewart – £244,634.45
  • London Guild – £125,492.13
  • Windsor Environmental Services – £116,562.38
  • BHD – £115,337.18
  • Box 3 Design – £86,956.66