Meade denies asset stripping and quits construction

Martin Meade, owner of the Meade Corporation, which has invested in several contractors, has announced that he has quit the construction sector. He added that it is completely wrong to portray him as an asset stripper, as some in the industry have claimed.

Meade describes himself as an investor. Referring to his construction investments, he said: "We’ve had our fingers burnt. We don’t understand the construction sector and will be sticking to manufacturing in future."

Meade Corporation built up a construction division which traded as Butterley Construction, its turnover being strengthened by the acquisition of contractors such as CJ Pearce and Thyssen.

Butterley Construction went into administration in January 2005. Dawnus Construction stepped in with an offer to save all the jobs of its Welsh staff. It also acquired the five Welsh contracts that Butterley was working on.

Butterley had been struggling as a result of a cash-flow problem, the English element of the business being the cause of the problems, mainly the workload in Yorkshire, Derby and Coventry. Butterley Construction’s unsecured creditors are thought to have lost between £1m and £3m.

CJ Pearce narrowly missed the chop, having been restored to independent life in December 2004 as the result of a management buy-out led by Ron McBride, managing director. It had been owned by the Meade Corporation for six months. CJ Pearce went into administration last week.

Rumours that the various construction businesses had been left paddling uphill as a result of their main assets, their headquarters, being sold to a separate company owned by Meade and his wife, have been dismissed by Meade as "ridiculous".

He declared: "The sale and leaseback of the property owned by CJ Pearce was at arm’s-length and was to a third party completely unconnected to me. And the money was used for working capital by CJ Pearce. We’ve lost a fortune on CJ Pearce.

"We helped CJ Pearce tremendously, to get it on a level playing field. It was in perfect shape when sold to its management. It is completely wrong to call me an asset stripper. We did not have cash out of either Butterley or CJ Pearce. In fact it was the very reverse, we put money in."

Meade said he has unresolved issues still regarding Thyssen. "We are still in litigation with the former owners, the Germans. I can tell you there was never a dividend paid out and we waived all management charges. If I could rewind history I would never have bought it."

[Contract Journal, 19 July 2006, p. 9]