15.9p in the £ for Botes' creditors?

Trade creditors of failed contractor Botes Building may receive up to 15.9p in the pound, according to the administrators. In the latest correspondence sent to creditors, joint administrator Peter Saville of Kroll reveals that Botes, which collapsed in June, owes 578 trade creditors a total of £8.9m.

Half of this figure is accounted for by sums due to just 22 creditors, owed between £100,257 and £420,973.

The best-case scenario for trade creditors is that £600,000 is set aside for them, giving 15.9p in the pound, while the worst-case is £467,000, giving 4.3p in the pound.

The best-case scenario for preferred creditors Natwest and Epic (the majority shareholder in the Botes group of companies) is settlement in full, according to Saville. The worst-case scenario is a shortfall of £1.5m to Epic.

The group's maintenance contracts had a book value of £5.2m and the administrators have already received the £3.2m payment from Connaught for the assets of Botes Maintenance, which it bought in July.

Botes' current contracts are expected to recover between £150,000 and £250,000, while the completed contracts may recover between £482,000 and £853,000.

The failed firm's ability to pay creditors may be helped somewhat by Simon Botes' purchase of the Botes Interiors (BIL) arm. Although he only paid £5,001, if the business makes more than £200,000 net profit this year, Botes Building will be entitled to 25% of the excess.

BIL must also help Botes Building complete contracts and has waived any claims against the failed parent.

A creditors meeting is scheduled for noon on 30 August at Kroll's office in London.

On 19 July, CJ reported that three creditors, WS Britland, Acheson & Glover and Amery, had invoked the Human Rights Act in an effort to exact full compensation for their work on Botes' Howe Dell School contract for Hertfordshire County Council. The council is still considering the matter.

[Contract Journal, 23 August 2006, p.1]