August 18, 2018

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August 15, 2018

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The deconstruction of Carillion

On 15 January 2018, Carillion, the UK’s second-largest builder and one of the Government’s largest contractors, was placed into compulsory liquidation and the Official Receiver was appointed as liquidator, with Michael John Andrew Jervis, David James Kelly, David Christian Chubb, Peter Dickens, David Matthew Hammond and Russell Downs of PwC being appointed as special managers to assist in the wind down of the business and realisation of its assets. The company has stated that the Government will be providing the funding required by the liquidator to enable the public services carried out by Carillion staff, subcontractors and suppliers to be maintained for the time being. The situation however remains fluid and further information will be released by the liquidator as to how things will be dealt with as matters progress. Details of the Carillion companies placed into liquidation are included in the website set up by PwC, the Special Managers appointed by the Official Receiver to assist in the liquidation.

The website will regularly be updated as issues arise in the liquidation and it also contains further information relating to employees, suppliers, customers, landlords and pensions.

Clients may need advice and assistance in relation to contracts with Carillion and how they are impacted by the liquidation. It is likely that the liquidator may wish to continue to work on a number of contracts and counterparties may therefore need advice on how to ensure they are paid for services rendered to Carillion following liquidation. It is possible that certain contracts may contain clauses stating that they automatically terminate upon insolvency. If the Official Receiver/Special Managers specifically request that work continues after liquidation, that work should be paid for in the ordinary course. We recommend that if carrying out post-insolvency work, contractual documentation should be reviewed to ensure parties are adequately protected.

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About this Author

Cathryn Williams, Squire Patton Boggs, Finance Attorney,
Partner

Cathryn Williams is a partner who leads the London Restructuring & Insolvency Practice Group. She acts for banks, financiers, insolvency practitioners, officeholders, corporates and private equity and distressed lenders in all aspects of non-contentious and contentious insolvency, restructuring, fraud and asset recovery.

Cathryn has a wealth of experience in restructuring, formal insolvencies, insolvent business sales and purchases and insolvency litigation. She has worked with businesses in a wide variety of industries including retail,...

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