Does the liquidation of Carillion impact you or your business ?

Tags: Redundancy, Debt, Liquidation, Carillion Collapse, Reducing Staff, Cutting Costs

The last year has seen a number of major businesses collapse, notably Monarch Airlines and now this week, Carillion.

Carillion’s financial troubles were well documented but the fact that the company went straight into a compulsory liquidation, rather than administration, caught some by surprise.

Administration allows the appointed administrators of a company to continue to operate a Company as they attempt to find a buyer for the business, or parts of the business. By entering liquidation the company ceases to trade and the liquidators role is simply to realise any assets and distribute them to creditors. The fact that Carillion bypassed an administration shows that there were no assets to sell and no viable parts of the business.

Carillion has contracts to provide school meals, prison meals, provide cleaning and catering in NHS hospitals, maintain army bases and for a variety of construction contracts. Therefore, it is likely that many people and many businesses will be affected.

If you are an employee of Carillion then your employment is likely to be preserved by the government and the government has issued guidance to those employees.

If you are a creditor of Carillion then it is unlikely that you will recover the debt in the liquidation. If you have supplied goods to Carillion which are unpaid and you have a retention of title clause you may be able to recover those goods from the liquidator.

Many businesses are reporting that they have unpaid invoices which will affect their cashflow in the short to medium term, potentially impacting on staffing levels moving forward. Many businesses are reporting that the consequence may well be that there are redundancies and job losses.

It is these indirect consequences where the fallout from the Carillion liquidation is most likely to impact businesses and their employees.

If you are a business affected and you believe that you may have to reduce your workforce then we can advise you how best to proceed and how staff reductions can potentially be avoided. If you are an employee then we can advise you on your employment rights and in the worst case scenario on any settlement agreement you enter into with your employer.

This article was written as part of a series following the collapse of Carillion, to see the complete collection please click here

If you need advice please contact Richard Newstead at 0113 350 4030 or email richard.newstead@scesolicitors.co.uk


SCE Solicitors is a boutique employment law practice based in Leeds which advises clients nationwide.  Please note that the information in this blog is to provide information of general interest in a summary manner and should not be construed as individual legal advice. Readers should consult with SCE Solicitors or other professional counsel before acting on the information contained here. 

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