The owner of a kitchen manufacturer in Hadfield, on the outskirts of Manchester, told kbbreview that it had liquidated holding company Regency Group Limited in a bid to simplify the trading structure of his business.
Gary Tootell was the managing director of Richmond Cabinet Company until its collapse into administration last December as a result of property developers withholding an estimated £500,000 of retention and contra charges.
The administrators at KPMG granted Tootell a licence to continue trading under a new name, Richmond Furniture Limited, with Tootell and colleagues agreeing to honour its agreements and warranties.
Tootell said that Regency Group Limited, formerly Regency Kitchens Limited, had not traded for 15 years and putting it into liquidation was part of a ‘tidying up exercise’.
He said that in due course it would also dissolve Extrapure Limited, the other holding company Tootell is listed as a director of, so that all trading is eventually done through Richmond Furniture.
Richmond Cabinet Company had supplied PJH with carcasses, and still does under the new company.
Tootell said about 90% of Richmond Cabinet Company’s customers had followed Tootell to the new company.
All 128 employees were transferred to the new company, and Tootell told kbbreview that surprising growth in orders over the past few months meant that the business needed to take on more people to keep up with demand.
“We are about 25% ahead of where we thought we would be at this time,” he told kbbreview.
Tootell said the licence with Richmond Cabinet Company was still in place.
He said the company’s main business was in the North-West and the Midlands, but they also did some work in London and the South-West.
He said in the future they would be wary of doing business with builders who tried to tie them in knots with complex contracts.
The shock collapse of construction giant Carillion more than a year ago put the spotlight on retentions abuse and a Conservative member of parliament, Peter Aldous, has been lobbying to change the law to introduce more equity into the process.
But the second reading of the private members’ bill has been postponed five times. It is currently scheduled for March 8 but Aldous has expressed doubts in the press that it may never be heard, particularly with the prolonged Brexit negotiations dominating time in parliament.
Department for Business, Energy and Industrial Strategy (BEIS) figures show subcontractors lost £700 million in cash retentions over the past three years as a result of a main contractor insolvency.
The KBSA has been vocal in its support of the Aldous Bill.