The UK government has published an update to the official guidance for employees, apprentices, subcontractors, suppliers, creditors and shareholders affected by the liquidation of construction giant Carillion
Carillion, one of the UK’s largest construction and facilities management firms, went into compulsory liquidation on 15 January 2018, leaving thousands of workers and businesses uncertain about their futures.
The Official Receiver was appointed as liquidator, with PwC acting as special managers of the 84 UK Carillion Group of Companies in liquidation (“Carillion Liquidation Companies”). The new update addressses creditors seeking to submit a claim regarding the anticipated distribution and closure of 74 UK subsidiaries in the Carillion Group together with the status of the remaining 10 companies.
The following points are summarised from the updated advice:
For employees and apprentices, no action needed
All former employees are expected to have submitted claims to the Redundancy Payments Service, and as such, no further action should be required at this stage.
In the event of a potential distribution to employees, the Official Reciever will issue relevant notifications at ‘the appropriate time’.
Update on the dividend prospects
An anticipated distribution schedule is available to provide an indication of whether there is likely to be a distribution to creditors.
Creditors should note the schedule is based on current information and any outcome for creditors is dependent on the value of the assets realised, the costs of realisation and administration costs of the liquidation estates.
Therefore, this schedule is subject to change and cannot be relied upon as guidance as to the actual outcome for creditors and shareholders. Any person choosing to rely on this information for any purpose, or in any context other than insolvency legislation reporting, does so at their own risk.
You can view the schedule here.
Information for creditors of a Carillion company which is not in the schedule
Creditors owed money by other Carillion companies subject to an insolvency process should refer to updates provided by those companies’ officeholders for details on the potential quantum and timing of any distributions from those companies.
How to register interest in submitting a claim
For the Carillion Liquidation Companies anticipated to make a distribution, creditors should register their interest to receive details on how to submit a claim by completing the registration form on the PwC website
Following a registration of interest, at the appropriate time PwC will write to creditors who are eligible for a dividend separately with details on how to submit a claim. All claims will need to be supported by the required documentation.
What notification will creditors receive?
At the appropriate time PwC will contact all known creditors of the Carillion Liquidation Companies where a distribution is going to be made (per the creditor list obtained from the companies’ books and records) and any additional creditors who have registered their interest, to provide them with details on how to submit their claim.
Will costs incurred in preparing a claim be refunded?
PwC are unable to refund the costs of preparing a claim or expenses incurred in obtaining information necessary to make a claim.
Next steps for others affected
- Employees should await official letters and claim redundancy and notice pay as instructed.
- Suppliers and subcontractors should continue work only if authorised by PwC; otherwise submit Proof of Debt forms for outstanding payments.
- Shareholders of the Carillion Liquidation Companies should monitor announcements, but returns are highly unlikely.
- For Carillion Liquidation Companies with no anticipated distribution, creditors do not need to take any further action.
For full details and updates, the government guidance can be accessed here.
The update reiterates that the infomration is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.
Industry lessons
Carillion’s collapse sent shockwaves through the UK construction sector, exposing vulnerabilities in complex supply chains and the heavy reliance of public services on a single contractor. For subcontractors in particular, the liquidation highlights the risks of overexposure to major contractors and the importance of contract terms, payment protections and diversification of client base.
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