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Verify the insolvency before you act on it

Check the public record before anyone stops work, moves materials or sends an angry email, because site rumour is often wrong. It can name the wrong company, process or day, and a notice of intention to appoint an administrator is not an appointment.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

Why it matters

Acting on a rumour creates problems of its own. Stopping work without the right to stop is a breach of your subcontract. Taking goods from a site can create a claim against you. And an angry email sent on the first morning will later be read by the administrator or liquidator. The facts are usually easy to find. An appointment is filed at Companies House and published in The Gazette. The company name and number on the filing tell you whether it is the company on your subcontract or another company in the same group. Ten minutes of checking tells you which next steps apply at all.

How to do it

  1. Look up the company named on your subcontract at Companies House, by its exact name and number. Check what has been filed in the last few days.
  2. Search The Gazette for a notice of appointment, a winding-up petition or a resolution to wind up.
  3. Check whether the filing is an appointment or only a notice of intention to appoint, and which company in the group it names.
  4. Write down what you found, where and at what time. Only then decide what to do on site.

Example

Illustrative example. The scenario and figures are invented.

The facts

On a Friday afternoon a subcontractor's site manager hears that the main contractor has gone under. The site manager wants to pull the gang and the plant off site that evening.

What happens

  1. The commercial manager checks the public record before anyone moves.
  2. The filing is a notice of intention to appoint administrators. It names the group's housebuilding company, not the contracting company named on the subcontract.
  3. The gang stays, the next application goes in early, and the site team photographs and lists the unfixed materials over the weekend.

The outcome

The contracting company enters administration 9 days later. The subcontractor has not walked off in breach, and its log, photographs and account are ready on the day of the appointment.

To have this done for you, see our Insolvency Claim service.