Legal bills, bad debts and delays caused by Building Safety Act helped send facades firm into administration

An ongoing dispute which racked up legal fees of £3m, a £4m bad debt and delays to jobs caused by the Building Safety Act helped send facades contractor FK Group into administration, a report into its collapse has said.

Begbies Traynor, which has changed its name to BTG, was appointed in February as administrator of the business and subsidiaries FK Construction and FK Facades.

In an update, BTG said the group’s problems began in September 2023 “when an entity launched litigation against FK Construction Limited”.

The firm is not named but is understood to be ISG, which collapsed in September 2024, and in its report BTG said: “The entity was then placed into administration in September 2024. FK Construction Limited was previously involved in 15 separate adjudications prior to the entity entering administration. The value of the claims against FK Construction Limited were estimated at £13m.”

It said the firm had cut overheads last year from £21m to £15m in a bid to trim costs but added: “In December 2025 the [FK} Group received a professional indemnity claim declinature from its insurers, together with a credit insurance claim declinature relating to the insolvency of the contractor as mentioned earlier.

“Despite ongoing projects performing well, the cash impact of the above rejected insurance claims, together with the substantial ongoing litigation costs and delays to several potential new contracts, resulted in the directors concluding that the Group was no longer financially viable.”

In the run-up to the administration, BTG said 57 staff had lost their jobs but a further 54 jobs had been transferred to Keenan Holdings, an aluminium and glazing manufacturer and installer based at the same Altrincham address as FK Group.

In its last set of results, FK Group booked a £5.5m exceptional item with the firm adding at the time the figure related to a dispute “between FK Construction Limited, one of the Group’s subsidiaries and a main contractor”.

In the accounts, for the year to March 2024, income at the business slumped 23% to £101m with the exceptional item sending pre-tax losses jumping from £614,000 to £5.9m.

According to the accounts FK Group, which was set up in 1979 and whose recent jobs included Sisk’s expansion of Manchester City’s Etihad stadium and which previously worked on the main stand at Liverpool, built by Carillion, employed 164 people.

BTG said FK Group owed unsecured creditors £11.3m including £10.9m to FK Facades.