Administrators for a collapsed civils contractor are still trying to recoup more than £500,000 of retentions – two years after the firm collapsed.
Since O’Keefe Construction collapsed in 2022, administrators from RSM Restructuring Advisory have recouped just over £24,000 of retentions. They are still working to recoup £502,400 of outstanding retentions, according to the latest progress report published this week.
They have now applied for another year-long extension to the administration process.
The Sevenoaks-based contractor went under after it defaulted on a company voluntary agreement it had agreed with RSM.
In its latest progress report, RSM said O’Keefe was owed more than £927,000 in retentions when it collapsed but £527,000 was “potentially recoverable”. RSM has since approached the contractors that owe retention cash to O’Keefe.
“However, they have mostly responded stating the costs of any remedial works superseded the amounts payable and therefore no monies are owed,” they said.
The report added: “The joint administrators are currently considering whether it is likely that any further funds will be received from retentions debtors.” They added that they expect to make a decision in the coming weeks.
A court order has extended the administration process from 9 July 2024 to 13 July 2025. A further recouping of retentions would allow RSM to make a part distribution to unsecured creditors and pay out what is owed to HMRC, O’Keefe’s only secondary preferential creditor.
RSM expects that the administration process will be complete by the new deadline.
O’Keefe owed more than 400 creditors around £13.2m when it collapsed. O’Keefe was then bought out by concrete-frame specialist Byrne Group for about £10m.
Some 150 staff joined Byrne Group from the collapsed contractor.
Retentions remain a controversial topic in the construction sector, especially over the impact they have on tier two and three contractors. Typically, retentions are worth up to 5 per cent of a contract value and may take years to be paid.
Major figures in the construction sector are now calling for urgent action against retentions, which they blame for squeezed margins at tier two and three levels. In June, Mace chief executive Mark Reynolds said government intervention was needed to get rid of retentions for good, as there was not enough support for the measure in industry.
Last year a survey by Construction News found that 82 per cent of subcontractors had retentions on more than half of their projects, while 65 per cent had retentions on more than three-quarters of their jobs.
CN has approached Byrne Group for comment.
