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Winding-up petition forces construction firm into administration

November 23 2012

Hallam Contracts, a Leicester construction giant went into administration yesterday after experiencing a cashflow crisis which left it owing about 300 other businesses, including sub-contractors and suppliers, about £4 million.

It has axed 105 of its 113-strong workforce. Hallam ceased trading after it was left reeling when a sub-contractor submitted a winding-up petition over an unpaid bill of about £500,000. In all, by the 90-year-old, award-winning company.

Administrators will be looking to pay back as much of this money as possible.

Hallam had been working on 50 projects, including 15 major schemes, among them the £12 million Hinckley & Bosworth Borough Council headquarters, in Hinckley, and a refurbishment project at the University of Leicester.

Joint administrator John Lowe, a partner at insolvency practitioner Begbies Traynor, in Leicester, said: “The directors very much regret the action they have had to take but, following a petition presented against the company, felt they had no other options.”

None of the directors, including managing director John Hallam, could be reached for comment yesterday. Mr Lowe said the company had been hit hard by the economic climate.

The owner of a south Leicestershire company, which is owed about £50,000 by Hallam, said he was unable to pay some of his workers. The owner, who did not want to be named, said: “We have got six sub-contractors who have not been paid and might not be for some time. “A five-figure sum is very significant for a company like us.”

Carl Nicol, managing director of Westcotes Flooring Company, of Broughton Astley, said the company was owed about £24,000 by Hallam for a contract completed in September. “We can recover from this, but when they placed the order they would have known they were on rocky ground,” he said.

Steve Atkinson, chief executive of Hinckley and Bosworth Borough Council, said the authority was looking for another building firm to complete the work on its HQ.

Grant Charman, deputy director of estates at the University of Leicester, said another firm would carry out the refurbishment project.

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