Property sales have fetched more than £2million for the administrators of failed building firm Grampian Construction.
But the disposals are not enough to pay off bank debt totalling about £5.8million at the time of the company’s collapse more than five years ago, or any ordinary creditors who were left out of pocket.
Grampian Construction went out of business in January 2013, with 34 staff laid off.
The Huntly-based firm, set up in 1997 and whose sole director was Kenny Riddoch, crashed owing more than £6million.
In a progress report just lodged at Companies House, the joint administrators at KPMG said they completed two property sales late last year.
Corskellie Farm and Caymire Farm, both near Milltown of Rothiemay, brought in around £1.8million and £187,500 respectively.
A further £12,210 was received from Mr Riddoch to settle a dispute about unpaid rent.
Joint administrator Tony Friar said: “The bank’s claim at the date of appointment amounted to approximately £5.8million. Interest continues to accrue on this.
“Distributions totalling £3.25million have been paid to the bank (Royal Bank of Scotland) … and a final distribution will be paid once the costs of the administration process have been settled.”
Mr Friar added: “The bank will not recover its indebtedness in full. Based on current estimates, we do not anticipate that there will be sufficient funds available to allow a dividend to be paid to the unsecured creditors.”
According to KPMG, Grampian Construction went bust due to cash flow problems amid “highly publicised difficulties in the construction sector”. It was the firm’s inability to fund ongoing projects which ultimately led to it going into administration, the professional services giant added.
But Mr Riddoch later claimed it was the bank’s controversial global restructuring group (GRG) which forced him out of business and seized his farms. GRG got involved after he asked to borrow extra money to finish off a development of flats in Aberdeen.
He said the bank charged him GRG fees of £10,000 a month and offered him a complex financial arrangement that has been the subject of a series of mis-selling scandals since the banking crisis, while he and his family ended up getting evicted.
GRG is the subject of an ongoing regulatory probe into allegations that it mistreated small firms in the wake of the financial crisis.