Two big practices have claimed they were not being paid by the contractor Forrest in the months leading up to its administration in early December.
Hodder + Partners and Falconer Chester Hall Architects both told the AJ they’d suffered difficulties on projects run by the collapsed Bolton firm.
Anthony Collier and Ben Woolrych of FRP Advisory were appointed joint administrators of Herbert T Forrest Ltd on 7 December 2018, saying incorrect preconstruction estimates across new projects had played a part in creating unsustainable cash-flows.
Hodder + Partners was working for Forrest on a build-to-rent scheme within Liverpool Waters for developer Peel.
Founder Stephen Hodder said the Plaza 1821 project (pictured) ‘had been paused for some time’.
He added: ‘Our recent monthly fees had been certified to Forrest but had not been passed on to us. Fortunately we have a back-to-back arrangement with the client in respect of our fees so all should be okay. But clearly the delivery of the project is significantly delayed.’
Falconer Chester Hall, meanwhile, was working on a pair of schemes for Forrest on behalf of developer Elliot Group: a two-tower scheme in Salford called The Residence as well as the Aura student accommodation project in Liverpool.
Partner Adam Hall said: ‘There was concern that the price for Residence Salford seemed too low. There was a general feeling that it did not feel quite right. New characters came along adding costs for basic items they should already have included. It looked like someone had come in and asked “What have we priced here?”
‘We were not being paid so we stopped work two months ago. Our fees were being valued so Forrest had been paid and were hoarding our back payment. It seems they were trying to make sure they had money in the bank, or sorting out other problems.
‘On Aura in Liverpool, it was a similar story. We stopped six weeks ago because we were not being paid. Our fees had been valued and Forrest had been paid.’
Hall said the administration of Forrest ‘was not a shock’ and that rumours that the firm was ‘wobbling’ had been around for some time.
On The Residence, Falconer Chester Hall is now working directly for the client’s project manager WYG, while subcontractor Careys is delivering the concrete frame and the developer is looking to appoint a permanent main contractor.
On Aura, local contractor Vermont has been brought in to finish the works.
Talks are continuing between various parties to find a new contractor for Plaza 1821.
Administrators said that as well as the incorrect estimation of costs on recent projects, Forrest had suffered from ‘delays and operational issues’ on three projects started before the company was refinanced in March 2017.
Collier said: ‘Despite the best efforts of the directors, the legacy issues facing the company have been unable to be resolved, resulting in an unsustainable financial situation.’
Some contracts were sold to Engie Regeneration, saving 64 of the 230 jobs at Forrest.
‘Unfortunately, it has not been possible to secure a sale for the construction and housing elements of the company, and we are working with all stakeholders to deal with the orderly wind-down of these divisions,’ said Collier. ‘We are pleased that during this process, working alongside management, we have assisted a large number of employees to find alternative employment within the industry.’
Elliot Group director Elliot Lawless said: ‘Our priority has always been to protect the interests of our investors and I’m pleased that we have put this issue behind us and can focus on delivering two great schemes for them. We’ve got a little bit of ground to make up in terms of schedule, but we’ve got a team in place well capable of getting us back on track.
The AJ has attempted to contact Peel Group.