Carillion: further detail on recommendations to unsecured creditors. Please share if you know any

Since my earlier blog it has come out that the liquidator is indeed “dealing in” Carillion’s contracts and this is very important for the unsecured creditors who have supplied and remained unpaid in those contracts.

The key point is that the liquidator has not repudiated the contracts, and declared them null and void, which was within their gift. The contracts still exist and for a number of reasons: vital public contracts, complex contracts with many parties involved, Carillion just one member of a consortium and so on.

One creditor has been contacted by a company that purports to have bought out one of Carillion’s contracts from the liquidator and considers the creditor obliged to supply under that contract, even if they remain unpaid under a different contract with Carillion. This gives leverage to the creditor.

Sauce for the goose is sauce for the gander: if the contracts still exist then the creditors should be paid for what they supplied. It cannot be the case that other contracts parties can draw benefits from the same contract while the Carillion creditors get stiffed.

That is the case they should bring against the liquidator now – to stop the dealing – or retroactively to get the liquidator’s actions reversed (and damages paid).

The other point is that creditors may have supplied physical goods or installations into projects that have now been handed over and are being operated or lived in, with all sorts of agents, freeholders, leaseholders benefiting.

The creditor still owns those physical goods or installations, whether they are girders or bricks, air conditioning, fire doors or whatever. They need to contact the respective agents, freeholders, leaseholders or whomever and give them 30 days to pay for the items, or else the creditor will make arrangements – at the other parties’ expense – to repossess what belongs to them.