On 19th August 2015 at a meeting of the company’s creditors, the appointment of Carl Faulds and Mike Fortune as joint liquidators was confirmed.
Pinnacle Maintenance (UK) Limited was established in mid 2008 by four directors with backgrounds in property development, in order to carry out property maintenance contracts. The company traded successfully for the first three years and generated healthy profits. The following year the company suffered its first trading losses as a result of a costs overrun on a particular contract.
In September 2012, the company was awarded a design and build contract by Guinness Hermitage Housing Association. Initially it was expected that the contract would be delivered “turn-key” by summer 2013, however due to programme issues including weather delays the contract overran by 5 months.
As the contract was nearing completion the new build warranty providers declined to sign off the contract for insurance purposes. It was cited that the piling contractor responsible for the design and build, failed to provide sufficient evidence that the piling was fit for purpose and therefore insurance could not be provided. As a result of the inability to insure the building, Guinness Hermitage Housing Association refused to accept the contract as being completed. The dispute resulted in legal action between the insurance companies acting for the company and the piling contractor.
The legal proceedings between the two insurance companies continued for nearly a year until it was finally agreed that the piling contractor would undertake the additional piling work required. However, as part of the outcome the company was required to pay a proportion of the remedial costs.
During the time that the legal proceedings were ongoing, the company was unable to carryout alternative projects as significant working capital was invested in the contract with Guinness Hermitage Housing Association. The inability to trade during this period resulted in cashflow difficulties and the company found itself unable to pay creditors as they fell due. The directors therefore sought independent advice and approached Portland in July 2015. As a consequence of those discussions it was concluded that the business was no longer viable and the decision was made to cease trading. Portland Business and Financial Solutions were formally instructed to assist in taking steps to place the company into voluntary liquidation.
Any return to creditors is solely dependent on the level of recovery possible from the outstanding retention.
For further details please see the report on the meeting of creditors here