Midas collapse set to leave massive debts unpaid

-Credit: (Image: Theo Moye)
-Credit: (Image: Theo Moye)


More than £46m of debts are likely to remain unpaid after the building arm of construction giant Midas went bust. A new report from administrators for Midas Construction Ltd reveals that there will be no cash to pay £45m owed to unsecured creditors, £1.5m in unpaid taxes and almost £400,000 due to former workers of the Exeter-based company.

Administrators for the fallen giant expect to end the administration in February next year - three years after the entire Midas Group went bust. And they have revealed there is unlikely to be any cash to pay the outstanding claims.

A new progress report, filed at Companies House by joint administrators at Teneo Financial Advisory Ltd, showed that, so far, they have received claims from 359 unsecured creditors amounting to £45m. But there is not likely to be any money to pay for these. The report said: “We do not anticipate there will be sufficient asset realisations to enable a distribution to unsecured creditors.”

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Teneo has also received 219 claims, totalling £392,000, from employees owed cash for unpaid wages, holiday pay and pension contribution, but said it doesn’t expect to have cash to pay them. Administrators have also received a claim for £1.52m from HMRC for unpaid taxes and also said it is expected there will be no money to pay this.

Midas Construction had the lion’s share of the debts after the Midas Group went belly up. Debts of nearly £14m have already gone unpaid after the dissolution of the companies Midas Group Ltd and Mi-Space (UK) Ltd - meaning the entire Midas collapse cost creditors more than £60m.

The Midas Group and subsidiaries Midas Construction, housing division Mi-Space (UK) Ltd, Midas Retail Ltd, Mi-Space Property Services Ltd, Midas Commercial Developments Ltd and Falmouth Developments Ltd, all fell into administration in February 2022. They blamed a toxic cocktail of Covid, inflation, money owed to them but not paid, and cash-flow problems for causing a financial disaster.

Only Midas Construction remains in administration as all the other companies have been dissolved. One secured creditor, Lloyds Bank Plc, has , however, been paid in full because its debt was guaranteed across all companies in the Midas Group by fixed and floating charges.

Administrators were able to raise more than £800,000 by selling Midas offices in Newton Abbot and Newport for £992,000 and £984,000, respectively, and some development land for £150,000, so Lloyds Bank could be paid.

Midas was headquartered in Exeter but had offices in Plymouth, Bristol, Indian Queens, Newton Abbot, Newport and Southampton. It worked for the private and public sectors and employed 253 people.

Just before its collapse, Midas had been ranked as the ninth largest private sector firm in the South West, by the Western Morning News Annual Business Guide 2022, with a reported turnover of £291,267,008. But it had announced a £2m loss in 2021 - its first deficit in 40 years of trading.

Its collapse left construction projects unfinished and creditors in Plymouth, Devon and Cornwall owed money. The fall of Midas was blamed for contributing to the liquidation of Plymouth- and Cornwall-based construction firm DNS (South West) Ltd, which is expected to leave creditors short of more than £1m.

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