Specialist contractor can continue to trade after creditors vote
Specialist contractor MPG has been given a reprieve from insolvency after its creditors voted to accept a proposed company voluntary arrangement (CVA).
Building revealed last month that the £46.3m-turnover firm had filed for a CVA. At the time the company blamed the move primarily on an unresolved £2m payment dispute with main contractor Galliford Try resulting from delays on construction of the final phase of the London 2012 athletes’ village, on which they both worked.
A well-placed source told Building over 90% of MPG’s creditors voted to accept a CVA at a meeting held yesterday.
Formal confirmation of the CVA will be sent out to creditors by accountant MHA MacIntyre Hudson in the coming days.
A CVA – a legal agreement with a company’s creditors on a schedule to repay debts – will buy MPG time to generate the cash to pay its creditors, who will be paid in dividends once sufficient funds are brought in.
MPG owes £10.2m to various parties, including £2.3m to trade creditors and £1.4m in retentions, according to a proposals report drawn up by MPG and MHA MacIntyre Hudson last month.
An MPG spokesperson told Building: “We are delighted. We have done a lot of hard work getting this CVA together and our clients and our supply chain have been amazingly supportive.”
The spokesperson added that one of its clients has awarded it a new contract in the last few weeks.
Galliford Try was ordered to pay a sum - understood to be around £350,000 - to MPG by an adjudicator last month, but MPG said it received correspondence from Galliford Try a week later saying it “refused to pay this”. Galliford Try has previously declined to comment on this allegation.
The MPG spokesperson said the firm has now issued a claim to the Technology and Construction Court to enforce the adjudication award decision.
Subject to the outcome of this enforcement decision, the spokesperson said MPG will “review our options” in terms of potential further proceedings to recoup the full £2m it estimates it is owed.
Yesterday’s creditors meeting was rearranged from 4 December.
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