Directors blame £3.5m client claim for speeding up firm’s downfall | Construction News

Blenheim House directors believed a reputation-damaging legal claim from one of its clients prevented it from winning new work in the run-up to its collapse, administrators have revealed.

The firm went under in July this year. It had already racked up losses of around £11.7m on three problem jobs when the client on one of those jobs – central London office renovation and new build scheme Marylebone House – hit the firm with a £3.6m claim for damages.

Blenheim House’s directors believed the claim “tarnished the company’s reputation, preventing them from securing the throughput of work which they usually benefitted from”, wrote the firm’s joint administrators, Evelyn Partners’ Adam Stephens and Kevin Ley.

The resulting losses left the firm without cash to pay subcontractors, the administrators’ report said.

Drylining subcontractor Radius Construction filed a winding-up petition against the firm on 8 July, after which many subcontractors stopped turning up to site, administrators said.

The firm’s directors partly attributed the losses on complex central London office jobs Marylebone House, Greycoat Place and Holbein Place to “tendered designs which were not complete, omissions in the tender and client delays”.

Directors also cited Covid, war in Ukraine and subcontractor failures for the firm’s financial woes.

An estimated 552 unsecured creditors are expected to file claims totalling £19m, including around £2m to former employees.

Administrators estimated the firm went under owing £7.5m to subcontractors and £2m to suppliers. Unsecured creditors are likely to receive between five and 10 pence in the pound, they said.

They have already facilitated a payment to subcontractors at two of the firm’s big projects, 25 Moorgate and Barge House, both in central London.

Beltane, the developer of Marylebone House, has been contacted for comment.

Blenheim House specialised in refurbishment and fit-out projects in London and the South East.