A judge at the high court has ordered the winding up of 10 Carillion companies.
Mr Justice Nugee heard from directors of the collapsed company whilst sitting in London on Friday 16 February, he concluded that the only option was to put the subsidiary companies into liquidation along with Carillion.
Lawyers for Carillion and the 10 companies, which includes Carillion JM Ltd and Carillion Holdings Ltd, said the companies are “cash flow insolvent”.
The failed company had debts of £1.3 billion and liabilities to pensions of £587 million and was a main contractor for the government including services to schools, transport and hospitals.
Matthew Abraham, who represents the company’s directors, told the court “The companies have run out of cash and cannot continue trading any longer.”
He also added “The group was aware, and made clear to the government, that the consequences of a failed restructuring would go beyond those typically associated with a major corporate insolvency and would include, among other things, a material adverse impact on the public sector and very significant job losses (of approximately 44,000 staff which the group employed).”
Carillion PLC and a further 11 companies have already been placed into liquidation since January 15th and the latest ruling brings the tally to 22, however, there are more than 100 Carillion companies in England and Wales plus more in other countries.
The official receiver has been appointed as the liquidator and Price Waterhouse Cooper have become special managers.
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