A fundamental company has been sold out of administration to a company with the same managers.
YPP Groundworks and Civils Ltd, based in Otley, West Yorkshire, was sold in a pre-pack deal this week in a move that saved the jobs of its 15 staff.
However, the company’s unsecured creditors are owed more than £1m, following the sale of the business and its assets for £30,000 to Yorkshire Pro Paving.
Kylie and Thomas Armitage are directors of both YPP and Yorkshire Pro Paving.
A report from the administrators shows that unsecured creditors are owed £1,090,945, with around a quarter of that sum owed to subcontractors after a major contract fell through. He owes 102 trade creditors £745,000.
The report said money was likely to be paid to unsecured creditors, but the total would depend on debtors’ ledger realizations.
YPP had a turnover of £5.7m in the year to 31 March 2022 and posted a pre-tax loss of £56,436. The business carried out foundation works for domestic and commercial clients, including major contractors such as Wates, Morgan Sindall and Kier.
Some of his most notable jobs included working at the Hilton York Hotel and at the University of Leeds.
The company was embroiled in a growing dispute over a development in York called Lowfield Green, which was initially valued at £3m but grew to £7m, with material costs spiraling after the pandemic they left the company with substantial losses.
The relationship broke down earlier this year, resulting in subcontractor employment obligations of around £250,000.
Steven Wiseglass, director of Manchester-based Inquesta Corporate Recovery & Insolvency, and Joanne Hammond, partner in Begbies Traynor’s Sheffield office, were appointed joint administrators earlier this month.
Wiseglass said there was “no prospect” of securing new funding and the sale was preferable to putting the business into liquidation.
“Following our appointment, several expressions of interest were made to acquire the business, but only one acceptable offer was received,” he said.
“The company has a proven track record in the Yorkshire region and a skilled workforce. The sale represents a better outcome than the alternative of putting the business into liquidation as it safeguards the jobs of its employees and their existing contracts”.
The directors of Yorkshire Pro Paving was approached for comment but did not immediately respond before publication.
