Ardmore companies seek CVAs as appeal continues

Seven businesses linked to Ardmore have launched company voluntary arrangement proposals as directors try to preserve parts of the group following the collapse of its main contracting operations.

The proposals cover Ardmore Group Holdings, Ardmore Group, Byrne Properties, Celebration Homes, Paddington Construction, Systemhaven, and Byrne Estates (Kensal Green). Business recovery specialist BTG is overseeing the process.

If approved, the arrangements would allow the companies to repay creditors under agreed schedules while continuing to trade rather than entering administration alongside the principal contracting businesses that collapsed in June.

The proposals remain subject to creditor approval. A company voluntary arrangement is a formal insolvency procedure under which an insolvency practitioner prepares a repayment arrangement and creditors vote on whether it should take effect.

Approval requires support from at least 75% by debt value of creditors who vote, subject to additional protections around connected creditors. Until that threshold is reached, the seven proposals are restructuring plans rather than completed CVAs.

The process is unfolding alongside Ardmore’s continuing litigation over a Building Liability Order connected with a £14.9m adjudication award obtained by Crest Nicholson against Ardmore Construction Ltd, which is now in administration.

Building Liability Orders were introduced by the Building Safety Act 2022 and allow the High Court, where the statutory conditions are met and it considers the outcome just and equitable, to extend certain liabilities to associated companies.

The mechanism is particularly important where a contracting company with responsibility for building safety defects no longer has sufficient assets to meet the relevant liability. It gives claimants a potential route beyond the original project entity into the wider corporate group.

That principle creates obvious tension with conventional group structures in construction and development. Large groups frequently separate contracting operations, development companies, property ownership, holding companies, and special-purpose entities for commercial and financing reasons.

Building Liability Orders can cut across those boundaries where the court decides the statutory test has been met. The result is that a liability arising from one historic project can influence the solvency and restructuring decisions of companies that were not the original contracting party.

Ardmore has permission to take its challenge to the Court of Appeal, where the scope and application of the earlier judgment will receive further scrutiny. The appeal does not suspend the commercial need to deal with creditors in the meantime, leaving the legal and restructuring processes running in parallel.

The CVA proposals should therefore be assessed on their own terms. They are intended to preserve continuing businesses by replacing existing debt obligations with an agreed payment timetable, but approval depends on creditors concluding that the proposal offers a better outcome than the available alternatives.

Construction insolvencies make that assessment unusually complicated. Assets may include development interests, retention balances, intercompany loans, work in progress, claims, property holdings, and rights under live contracts, while liabilities can include subcontractor balances, warranties, defect claims, finance, and historic project exposures.

Each company also has its own creditor pool. The presence of the Ardmore name across a group does not make debts interchangeable, and suppliers need to establish which legal entity entered a contract before they can assess the effect of any particular CVA.

That detail is important for subcontractors with unpaid invoices. A creditor may have commercial relationships across several group entities but only one debtor under a specific contract, and recovery depends on the arrangement proposed by that company rather than the group’s aggregate position.

Live property interests add another consideration. Keeping development and holding businesses outside administration may preserve asset value that could otherwise deteriorate through interrupted planning, finance, management, or disposal processes.

Whether that value is sufficient to support the proposed repayments is a matter for the creditors and the insolvency practitioner, not something established by the launch of the CVAs. No completed rescue should be inferred before the voting processes have taken place.

The Building Liability Order appeal introduces another source of uncertainty because the financial exposure of associated companies may depend partly on how the Court of Appeal treats the earlier judgment. A material change in the legal position could alter assumptions used when assessing liabilities across the group.

For the wider construction sector, the case sits at the junction between building safety law and corporate insolvency. Developers and contractors are now seeing historic technical defects feed directly into questions about group structure, creditor recovery, and whether otherwise continuing businesses remain insulated from liabilities elsewhere in the organisation.

Ardmore’s seven proposals represent an attempt to keep those businesses trading while that legal position develops. They may provide a viable route through the restructuring, but until creditors approve them, they remain proposals rather than a settlement of the group’s financial or building safety exposure.