Fit-out firm Beck ‘owed £16m in contract dispute’ as unsecured creditors hit for £69m

The amount of money Beck Interiors’ management said it was due as part of an “ongoing customer dispute” was £16m, an administrators report has said.

Part of the fit-out business was saved in July under a pre-pack deal but the remainder went into administration.

In its report, filed last Friday, Begbies Traynor said Beck “faced liquidity challenges owing to a dispute with a customer that has led to a figure estimated by management to be in the region of £16m being withheld”.

It said the firm was also hit by supply chain collapses and increased costs on several jobs.

Begbies Traynor said it was brought in over the summer to find an investor and “136 parties [were] specifically contacted during the marketing process”. But it added: “There was no interest in investing in the business on a solvent basis.”

The report said that unsecured creditors are owed £69m with firms told not to expect anything back.

Beck’s Whiteleys contract in west London, where it has been working for Finchatton to carry out work at the UK’s first Six Senses luxury hotel, was sold under a pre-pack for £200,000 to a firm called The Hub Consulting.

The Whiteleys deal included 21 employees while a further 50 employees working on the renovation of the Dorchester Hotel in London were transferred under TUPE regulations to a firm called Elemental Newco 2 Ltd, also under a pre-pack for £100,000.

Both Hub and Elemental Newco 2 include directors of Beck, the report said.

The parts of Beck Interiors that went into administration include 148 employees owed around £710,000 in missing wages and holiday pay which the administrator said they can expect to see a portion of paid eventually.

HMRC is also owed £6.9m with the report adding it too is expected to see some of its missing taxes back.

In its last set of results, signed off last September, Beck Interiors more than doubled pre-tax profit to £7.2m in the year to December 2022 on turnover up 62% to £139m. It had a cash balance of close to £20m and said that its future turnover was expected to be around £150m. According to its last set of accounts, the firm employed 256 people. The company was set up in 1994.