The Importance of Urgent Legal Action Required Following Liquidation of Carillion

The Liquidation of Carillion is devastating personally for the many employees caught up in the company’s failure.  However, we are aware that smaller subcontracting companies in Scotland have also been devastated by the failure.   The fact the Official Receiver has been appointed Liquidator with PWC as Special Managers, does not suggest there is much in the way of the business that can be saved.  Time will tell.

Suppliers should also take  urgent legal advice if they believe they may have enforceable retention of title clauses that would allow recovery of goods supplied, but not paid for, to Carillion.  It is imperative that urgent contact is made with PWC if retention of title clauses are to be exercised.

At this stage it is vital that directors carry out an objective assessment of where Carillion’s failure leaves them.  Do they still have a viable business?  Is there going to be extra capital requirements to cover immediate losses?  Will extra lending be required?  Will lenders be supportive?  Will the position get any worse by continuing to trade?

It is vital those questions are asked and decisions properly documented and vouched because in the event that companies continue to trade and the position is made worse, the risk is that Directors are exposed to wrongful trading claims or other personal liability down.

It is important that early advice is taken so that different restructuring options, informal and formal, can be considered to try to save the business, and hopefully the company involved.

Insolvency & Corporate Recovery Lawyers Scotland

BBM are experienced in advising subcontracting companies caught up in large scale insolvencies like this and are happy to have no obligation discussions with companies affected. Contact us today to find out how we can help.