Benson trade creditors give up on payout

Three thousand of Benson’s unsecured trade creditors have failed to respond to the administrator’s request for details of how much they are owed.

A reason for their lack of interest could be that the prospect of getting anything worthwhile is remote – the latest estimate from Michael Gerke, joint administrator with PricewaterhouseCoopers (PwC), is 10p in the pound.

When Benson crashed into administration in December last year, it left unsecured creditors owed £23m. A statement of affairs drawn up by the administrator last week showed that there was an estimate of £35m of assets available to preferential creditors, the two largest elements of this being work in progress (worth £15.8m) and trade debtors (£9.9m).

The receipts and payments account shows an inflow of £5.7m since Benson went into administration. The majority of this total is the £3m paid by Bluestone, a Morgan Sindall subsidiary, for parts of the Benson Group, including its three former offices in Reigate, Hatfield and Southampton.

After this sale, 241 contracts remained. In a letter to Benson creditors, Andrew White of PwC wrote: "Each of these contracts was carefully reviewed, with the objective of realising any value.

"Following that review, 84 of the contracts were deemed to have no realisable value, leaving 157 contracts to be finalised. As of 12 June 2005, the final accounts on 30 contracts had been agreed and a further three contracts had been novated.

"We have recovered £1,760,943 from these agreed contracts, with a further £90,085 agreed, but at that date not paid."

PwC is still working to "realise value" from the remaining 124 contracts.

Benson’s creditors’ committee has approved fees of close on £450,000, which will go to the administrator as it has put in 1,940 hours of work. The average pay-rate stands at £232/hour.#

PwC was brought in on 7 November 2004 to review the debtors, work-in-progress, cash flow, prospects for 2005 and, in the light of the findings, to spell out the options for the group.

Benson Group lost £664,000 in 2002 and £249,000 in 2003. Towards the end of 2004, Benson’s bank was worried about the impact of work-in-progress issues and their effect on the balance sheet. It pulled the plug on 10 December.

• Meanwhile, on 23 March, former chief executive Alistair Sloan bounced back. Together with two other former Benson directors, Steve Pope and Martin Brackpool, he formed Redwing Construction. Initially using his home address in Copthorne, Sussex, as its trading address, Sloane switched Redwing’s registered office on 4 May to its current location in Crawley, West Sussex.