Surgo Construction moves to liquidation as administrators flag ongoing investigations

Surgo Construction has moved from administration into creditors’ voluntary liquidation, with administrators from FRP Advisory concluding the process after determining that a distribution to unsecured creditors would be better pursued through a liquidation framework.

The company, a UK construction contractor, entered administration in March 2024 following financial distress tied to incomplete contracts, cash flow pressures, and mounting creditor claims. Administrators Steven Ross and Stephen Lancaster were appointed by secured lender White Oak, acting as qualifying floating charge holder, and tasked with realising assets and assessing potential recoveries for creditors.

During the administration, the officeholders realised approximately £609,000 in cash and began pursuing recoveries tied to debtor balances and work in progress, though progress was limited, with only modest sums recovered to date against higher initial expectations. The estate also benefited from insurance refunds and small asset disposals, including plant and machinery sales.

A central facet of the administrators’ mandate has been their ongoing investigative work, which will continue into the liquidation phase. The administrators have been investigating the company’s affairs, including a review of books and records, identification of potential claims against directors or third parties, and engagement with creditors to identify concerns regarding the conduct of the business prior to insolvency.

According to the administrators, there are matters which remain outstanding, including pre-administration asset transfers and their value, dealings with connected parties, the true ownership of transferred assets, the accuracy of financial statements, directors’ conduct, and the timing of insolvency and actions taken in response. Administrators have cautioned creditors that the complexity of this matter means investigations are likely to take a considerable amount of work to bring to a conclusion.

The transition to liquidation reflects the administrators’ conclusion that unsecured creditor recoveries could not be achieved within the administration itself. While preferential creditors, including employee-related claims, are expected to receive payment in full, secondary preferential claims, largely relating to HMRC liabilities, are projected to receive only a partial dividend. Secured creditors are not expected to see meaningful recoveries from floating charge realisations.

Looking ahead, the liquidators will continue efforts to realise outstanding receivables, pursue any viable claims identified through the investigations, and address unresolved matters including contractual recoveries and director-related balances. The continuation of investigative work signals that potential litigation or recovery actions may yet form a meaningful component of creditor returns, even as the administration formally concludes.

The administrators have been assisted by Bermans (legal), Hay & Kilner (legal), Leslie Keats (quantity surveyor), Eddisons Commercial (asset valuer and auctioneer), McGillivrays Chartered Surveyors (Chartered Surveyor and valuer), Courts Trustees (pension advisory), and City Press (PR services).

Read their report here.