AN Ayrshire-based housebuilder collapsed into insolvency, leaving homes unbuilt with administrators having to “forcibly gain entry” to the site after the company racked up more than £4.5 million in debt, it has emerged.
Hood Property Cardrona Limited had been working on a site near Peebles, building 20 homes, when it fell into the hands of administrators last year.
James Stephen and Kerry Bailey, of BDO, were appointed joint administrators at the time, and extended the administration to this September, as they outlined the potential sale of the firm’s land near the Scottish Borders town in a recent report.
Administrators had to “forcibly gain entry” to the closed site after the firm collapsed, with the report also revealing the company had a “significant shortfall” in funds for those owed money, as first reported by The Herald.
The report also stated that offers had already been accepted on several of the plots when the administrators were appointed, but there would need significant further funding to finish building the properties and complete the development.
The report said: “Upon appointment, my staff together with our appointed security agent visited the company's development site at Cardrona next to the town of Peebles in the Scottish Borders.
“Nobody was present at the site, and they therefore required to forcibly gain entry to enable an initial assessment of the site to be carried out and new security measures to be put in place.”
The administrators also noted that a sale is now proceeding and that they anticipate it will be completed in the “next few weeks”.
Stephen and Bailey said they were required to make an application to court for authority to sell the site, adding that they “anticipate the court will grant the application, but the process is leading to a delayed completion date”.
The report added that the delay is resulting in additional legal, time and property holding costs.
Hood Property Cardrona Limited entered into an “intercreditor agreement with Crowd Property, Duart Investment and Castle Fox”, registered at Companies House, according to the administrators.
They added: “Based on the current offer being progressed, Crowd will receive proceeds of £1.1m, resulting in a significant shortfall.
“The amounts due to Duart Investments and Castle Fox are unknown, but it is not anticipated that they will receive any return on their lending in the administration.”
They continued: “This ranks the security granted by the company in favour of Crowd Property ahead of the security granted by the company in favour of Duart Investments and Castle Fox.
“At the date of appointment, the amount outstanding to Crowd was £4.5m.”
According to the report, His Majesty’s Revenue and Customs (HMRC) has submitted a claim of £4684, but administrators noted that it is not anticipated that a dividend will be paid.
An earlier report estimated £300,000 worth of claims expected, but the administrators said in the update that it is anticipated that a dividend will not be paid to unsecured creditors.
It comes after it was revealed earlier this week that another housebuilding company collapsed into administration with all homes left incomplete after racking up hundreds of thousands of outstanding debt.
However, the homes in Ardrossan could be completed in the future after administrators agreed a way to finance the remaining construction.
A report on Bellshill-registered Sparkle Berry Homes Limited revealed that former contractors have assessed the remaining costs, with discussions on how to complete the homes having been held over the last few months.
Michelle Elliot and Callum Angus Carmichael, of FRP Advisory, were appointed joint administrators of the firm last month.
It was also revealed last month that the Stewart Milne Group collapsed into administration owing more than a quarter of a billion pounds.
At its prime, the firm employed hundreds of people and operated more than 35 housing developments across the north east of Scotland, central Scotland, and north west England.
The Stewart Milne Group fell into administrators' hands in 2024, and new documents showed that the firm owed £258 million at the time.
According to the Teneo Advisory report, more than £141m is owed to 1361 unsecured creditors. Among those who were owed money from Stewart Milne Group were the Bank of Scotland, owned by Lloyds Banking Group, to the tune of around £115m, the administrators’ report indicates.
HMRC was also owed the sum of £1.8m, with 196 claims from former employees also being due around £268,000.
