North-east firms owed more than £840,000 after collapse of Richard Irvin

More than £840,000 is owed to firms after the collapse of Richard Irvin
More than £840,000 is owed to firms after the collapse of Richard Irvin

North-east firms, including two local authorities, were owed more than £840,000 after the collapse of an energy company.

Richard Irvin and Sons – whose activities included facilities management (FM) and mechanical and electrical work – owed more than £21 million when it went into administration in December with the loss of 109 jobs.

A last-minute “pre-pack” deal was brokered to save 337 jobs – 96 in the Granite City – at the firm as it collapsed, with private-equity firm Rcapital Partners snapping up the facilities management side of the business and assets via an investment vehicle for £1.1m.

Pre-packs involve the sale of a struggling business being negotiated prior to administration.

Administrators at EY, which managed the deal, said Richard Irvin and Sons also owed about £3.7m to the Bank of Scotland, including an overdraft of around £2.5m and a term loan worth about £1.2m.

Now, in a report to Companies House, the long list of creditors across the country is outlined, including 100 local businesses.

Marischal College

One of the largest outstanding bills is for £86,227.80 to Aberdeen City Council. Moray Council is also due £3,265.45.

Both councils declined to comment on the debts.

Full list of the 100 north-east firms owed money

Stephen Flynn, the city council’s SNP group leader, said: “The council should always seek to recover any monies due unless exceptional circumstances arise.”

Oil and gas detection firm Oteac in Aberdeen was owed the most, according to the Companies House report, with £121,757.20 outstanding.

One business owner, who asked not to be named, today hit out at the collapsed firm.

They said: “It has been annoying, this whole process, and it must be for everyone involved and for people who have continued to trade with them.

“The new company wasn’t set up overnight. It was probably in the making for months knowing that they were going to pull the plug on Richard Irvin and Sons, leaving a huge pile of debt, and starting up a new company straight away.

“All the publicity at the time was that they were able to save the jobs with the new company.”

A director of another company, who asked not to be named, questioned why the firm continued to accept work when the financial strains it was facing meant bills would not be paid.

He said: “Richard Irvin has known since July 2018 they had issues. During this period they still instructed work knowing they would not have sufficient funds to pay.

“We have already queried what our balance is – our figure is more in the region of £23,000 on top of the work we had scheduled for them.

“This company had an ethical duty to inform their customers of the situation. As usual it is the small local companies that suffer.”

The boss of Finesse Quality Coatings Ltd, which is owed £1,281.50, said he was “bitter” about the debt.

Managing director Jeff Lumsden said: “We’re quite a little company and we’ve been dealing with them for years.

“We thought we had a good relationship with them, but obviously not as good as we thought.

“It’s a lot of money for a small company, especially at the moment. We are still quite bitter about it.”

The Wood Centre, based in Elgin, is owed £312.45.

Manager and co-owner Eddie Laing said: “We heard through the grapevine they were filing for bankruptcy – this was a while back. No one ever contacted us – we still have no communication at all with them.

“It’s not until recently we got a letter. We had been with the company since we started which is about 15 years ago.

“It’s very disappointing and, honestly, a shock.”

A spokeswoman for RCapital Partners, new owner of the facilities management side of the business, did not wish to comment on the debts.

One company said the work it’s owed money for was at a children’s hospice.

Aberdeen-based AVC Immedia was listed in the administrator’s report as being due £6,898.04.

Spencer Buchan, managing director of ACV Immedia, said: “It’s sad to see Richard Irvin face this predicament, painful for both the employees affected and businesses owed money. We feel for them at this time.

“For a business like AVC, the prospect of not receiving monies owed is never ideal and concerning. However, given that the project AVC delivered was an installation of screens for a children’s hospice in Glasgow, we will treat this as a charitable donation if, following the process, we find ourselves not receiving the monies owed.”

Gary Henderson, managing director of Grampian Fasteners, said his firm was due £165.56, adding: “We were quite lucky we aren’t owed very much but it did come as a surprise to us.”

Richard Irvin and Sons’ finance director George Still and facilities management managing director Mark Buchan ended up with minority stakes in RCapital Partners’ Richard Irvin FM.

But in its notice of administrator’s proposals, EY said this did not amount to a sale to a “connected party”.

Its report said: “As far as we are aware, George Still and/or Mark Buchan had no connection with Rcapital Partners LLP or the purchaser prior to this transaction.

“Difficult trading conditions, together with increased political and economic uncertainty, resulted in declining margins in respect of the company’s contracts.

“Facilities management benefited from recurring contracts which were geographically diverse and generally more profitable. However, a number of mechanical and electrical contracts were completing, which led to delays in receipts.”

EY declined to comment on its report.