EY has already recovered more money than had been anticipated by failed firm鈥檚 directors
Administrators for ISG have so far clawed back 拢19.2m from the collapsed firm鈥檚 debtors.
In their latest progress report filed to Companies House, EY鈥檚 Timothy Vance and Alan Hudson revealed that they had already recovered more than had been expected when the contractor went into administration on 20 September 2024.
At that time, the company was engaged in a total of 723 projects, of which 539 were finished projects where practical completion had been achieved and a retention balance was outstanding.
The directors鈥� statement of affairs estimated that there was a potential 拢11.4m of realisable value from what the company was owed on these schemes.
However, during the first six months of the process, the administrators 鈥渁chieved a number of full settlements of outstanding sums from certain contracts鈥�, enabling them to surpass the number predicted in the statement of affairs.
A number of these recoveries had 鈥渋nvolved legal disputes鈥�, according to administrators.
However, the money so far recovered is far less than the 拢241.7m book value of what the company is owed.
EY refused to provide an estimate of future recoveries 鈥渋n order not to prejudice the outcome fo the continuing debt collection process鈥�.
It said the recovery of debtor balances was an 鈥渋nherently complex鈥� area 鈥渄ue to the potential for significant contractual counter-claims鈥�, and that the process could take 鈥渟ome years鈥�.
鈥淲hile the joint administrators are confident of achieving further significant recoveries, the full quantum and timing remains uncertain and is likely to require legal action in some cases,鈥� they said.
>> Also read: Downfall of ISG: how and why it collapsed
The report also revealed that around 1,650 protective award claims had been made against the company by former employees. These are compensation payments when an employer fails to properly consult with employees during a collective redundancy process.
The joint administrators were required to make the vast majority of the companies鈥� 2,400 staff redundant when it was appointed, with just 216 people kept on to assist with the wind-down.
Individual protective award claims can be brought by more than one person, so the total number of former staff bringing cases to the employment tribunal could be even higher. The tribunal can award up to 拢5,600 in cases where the former employer is insolvent, meaning the total bill could be more than 拢9m if all claims are successful.
EY鈥檚 latest update also revealed the challenges the administrators faced in decommissioning ISG鈥檚 IT systems. They required assistance from a specialist data team due to the 鈥渉igh complexity of the group鈥檚 IT architecture and infrastructure and the size of the companies鈥� electronic data鈥�.
The data preservation process was completed by 28 February this year, at which point the IT infrastructure was decommissioned.
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