O’Donnell administrator sells assets to Reeds Plant

Unsecured creditors of Newcastle-based civil engineering contractor O’Donnell Bros are not expecting a penny back from the firm after it went into administration last month.

A letter sent to creditors from administrator DTE Leonard Curtis, seen by CJ, revealed that it had sold off the company’s assets to Reeds Plant.

Excluded from the sale were assets owed by O’Donnell as part of its problem contract with Northern Electrical Distribution, which is believed to have sunk the company. These assets included the installation and maintenance of electricity cables after the firm ceased trading on 9 May.

DTE was unwilling to disclose the value of the asset sales, how much creditors would receive, a date for a creditors’ meeting and the extent of O’Donnell’s debt.

However, in a brief statement,  DTE did confirm the sale of the contractor’s assets and that it would provide “assistance” to up to 500 O’Donnell staff likely to lose their jobs following the company’s demise.

The GMB, which is handling the redundancies, is pursuing a legal challenge against the company for not providing a proper consultation with staff before announcing the job losses.

Financial information on O’Donnell is very limited, although it is known that the contractor, which had £71,332 in assets in 2004, went under owing: £299,505 to the Inland Revenue; £110,460 to Customs & Excise; and £73,709 to creditors, including £51,507 to RMD Kwikform, £17,820 to Efco and £2,853 to GE Capital Equipment Services.

However, one creditor, who wished to remain anonymous, but is owed a substantial sum, told CJ the figure owed by the contractor could be “10 times” the amounts being quoted.

“I wouldn’t be surprised if O’Donnell owed a lot more than is currently in the public domain. The situation has been a huge blow for us as we don’t expect to get a penny back from the company. There has been no mention of a creditors’ meeting from DTE, which is very unusual. The collapse of O’Donnell came as a complete surprise to us.”

CJ was unable to contact O’Donnell for a response.