Unsecured creditors to get nothing from Lark

Unsecured creditors will not get a penny following the collapse of Cornwall-based housebuilder Lark Construction, according to receiver Grant Thornton.

Secured creditors will get only a fraction of their anticipated pay-outs after the contractor folded in August with debts thought to be about £4m following losses on problem contracts (CJ 25 August).

Grant Thornton has sent letters to Lark’s 474 creditors outlining the situation and the slim chance of receiving any compensation from the contractor’s collapse.

The receiver is still waiting for a statement of affairs, which is expected to be released at the end of this month, and will reveal the full details of Lark’s demise.

A creditors’ meeting is due to be held in early November with a report being released to creditors three weeks later.

A Grant Thornton spokesman said: "It is unlikely to be good news for creditors. It will be difficult to determine exactly what is due to creditors as most people will probably not write in with their claims as they know they are unlikely to get any payouts.

"Secured creditors, such as the banks, will get a much smaller payment than expected. Dividends to unsecured creditors will be nil," the spokesman said.

Lark’s 10 profitable social housing contracts were sold to Rok at the end of August. Rok fought off competition from Mowlem, Connaught and Midas to secure the contracts and provide employment to most of Lark’s 100 staff.