Mid Group administrators given extra six months to investigate firm’s transactions

Creditors of collapsed builder Mid Group have granted administrators an extra six months to investigate the firm’s transactions.

Investors owed money by the stricken offsite specialist, which went under in July last year, made no objection to accountant Cowgills’ request to add a third administration period and report to the usual two six-month periods.

In its latest report, Cowgills said it deemed the extension necessary to enable administrators to continue their investigations into “company transactions involving connected parties”.

Administrators are required to undertake Investigations into company transactions to comply with legislation including the Company Directors’ Disqualification Act, and these may not bring any financial benefit to creditors.

Cowgills has already submitted its confidential report into the conduct of Mid Group’s directors to the Department of Business, Energy and Industrial Strategy.

But administrators Jason Elliott and Craig Johns said their investigations had “revealed that several transactions made by the company require further investigation”.

It added these come “alongside other matters which we do not wish to currently disclose for confidentiality reasons, as not to jeopardise our investigations”.

The accountant said an update would be provided to creditors “when we believe it is appropriate to do so”.

Mid Group, now known as Mid Holding Co UK Limited, had a turnover of £56m in its most recently filed accounts for the 2020 financial year, with a pre-tax loss of £2.5m.

Its collapse follows rapid growth for the firm, which was only formed in 2014. It has described itself as one of the UK’s “fastest-growing construction companies” and as a “leading offsite construction, consultancy and development businesses.”

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Cowgill’s second report also revealed Mid Group was owed more than £60m from its collapsed subsidiaries.

This includes £48m from Mid Contracting and Consulting, which is in administration, £7m from Mid Group (West) Limited, which is in liquidiation, and £14,000 from Mid Group Services, which is also in liquidation.

Of the firm’s secured creditors, one is currently owed around £1.5m, believed to be private bank Coutts, while there are 73 outstanding claims from unsecured creditors worth a total of more than £24m.

Elliott and Johns are also seeking to recover a £500,000 paid as a deposit to a contractor for works which were never completed. The report says it is understood a commercial settlement may be required in this instance and it is not certain how much of the deposit will be retrieved for creditors.