The Environmental & Process Engineering Group sank after 47 years in business last November

A Southampton-based M&E contractor which collapsed last autumn was felled by a series of payment disputes, an administrator’s report has said.

The Environmental & Process Engineering Group (TEPE), which traded under the name Working Environments Ltd, sank into administration last November after 47 years in business.

Begbies Traynor was called in towards the end of November and a progress report filed last month has now detailed the extent of the payment wrangles TEPE found itself in towards the end of its existence.


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By the time administrators were called in, TEPE was in dispute over hundreds of thousands of pounds

The administrators said the firm had 30 members of staff had worked on 115 schemes at the time of its collapse and had made a £1.4m pre-tax profit on turnover of £36m in the year to September 2021.

But the report said the firm was expecting this to have fallen by around a third to £27m for the following year after four schemes were deferred and a main contractor went bust on a job it was working on in Bristol.

And it also laid out the scale of the disputes it was having to deal with, with the firm facing a series of payment bust-ups running into hundreds of thousands of pounds.

TEPE faced a shortfall on a hotel scheme on which it had been expected to generate revenue of more than £400,000 a month for five months from November last year.

But Begbies Traynor said TEPE initially received a payment certificate for £150,000 less than expected. A settlement was “reluctantly” agreed at £210,000 in order to generate cash but only £150,000 was received.

It also had an insurance claims dispute with £291,000 outstanding but, the report said, “no monies were received” while a £150,000 payment on another contract it had been expecting in the first week of November was delayed into the following month.

A further £106,000 that it had been expecting in the middle of that month “was no longer expected to be received” because of a dispute with a contractor.

And Begbies Traynor said a job in Birmingham was also at the centre of a dispute with TEPE on which it was expecting a £550,000 payment for work in September but was only handed £28,000. A revised payment certificate was issued after a challenge by the firm – but it was still £180,000 off the expected figure.

It was also facing a £5.6m payless claim for liquidated ascertained damages in relation to delays on a job in central London. “This is despite the group being largely successful in arbitration proceedings relating to extension of time claims in 2021 and 2022,” the report added.

Begbies Traynor said secured creditor NatWest was owed £2.8m with £828,000 made from the sale of TEPE’s former office in Southampton being used to eat into part of that sum. But it has told the bank that getting hold of the remaining money was “uncertain”.

Employees are owed around £56,000 in missing wages and holiday pay with Begbies Traynor saying these payments are also “uncertain” to be made

HMRC is owed £168,000 while three sister firms also owe the taxman a further £205,000 between them. Unsecured creditors, owed over £2.8m, have been told they won’t be getting any of their money back.