Newcastle-based contractors Surgo Construction has entered administration, as confirmed during it’s legal battle with Bellway Homes
A barrister speaking during a brief hearing in the Construction and Technology Court that Surgo had appointed administrators on 14 March, with an estimated 46 staff now seeking new jobs.
Administrators from insolvency specialists FRP Advisory and Lucas Ross have taken charge of the affairs of Surgo Construction Limited.
The company operated across Durham, Gateshead, Newcastle and elsewhere in Northumberland, on projects worth £3m to £20m.
Surgo Construction was in a legal battle with Bellway Homes since September 2022
Both Bellway Homes and Surgo Construction claimed that the other owed them money. In the latest development, Bellway served Surgo with a winding-up petition relating to alleged non-payment.
Surgo Construction’s most recent accounts show turnover of £14.4m in the year to 31st October 2022, with a pre-tax profit of £75,000. According to the company website, Surgo had been in business for over a century.
Lucas Ross posted on social media regarding the news.
“Surgo lost an adjudication with a supplier, Roundel Manufacturing Limited, in relation to the supply and installation of kitchens for a development for Bellway Homes. Surgo was ordered to pay over £180,000 to Roundtel, which it assessed on a ‘true value’ valuation.
“Roundtel assigned their rights to the ultimate customer, Bellway Homes, who then took Surgo to court seeking a summary judgement. Surgo lost and the court awarded summary judgement leading to Bellway seeking to petition for the winding up of the company.
Employees now face an uncertain future
“Sadly, this led to Surgo’s financial woes culminating in its administration, signalling a dramatic turn of events for the company and its employees. The announcement has left many shocked and saddened, with employees now facing an uncertain future following their redundancy days before it fell into administration.”
Joint administrator Stephen Lancaster from Lucas Ross added: “Surgo’s administration serves as a stark reminder of the fragility of success in today’s economic climate, highlighting the unpredictable nature of the construction industry and the challenges faced by businesses within it”.
