Carillion

Carillion, the UK's second largest construction business, has gone into compulsory liquidation. Take a look at what this means for individuals and businesses.

The Carillion collapse is putting thousands of employees and up to 30,000 businesses at risk. Here’s our short guide to what to think about if you are affected.

What has happened?

Carillion, the UK's second largest construction company, has suffered financial difficulties after losing money on a number of large contracts, which contributed to debts of at least £1.5 billion. Having issued three profit warnings, Carillion went into compulsory liquidation on 15 January 2018.

What is liquidation?

Liquidation, also known as winding-up or dissolution, is a legal process to bring a commercial venture to an end. The aim is to ‘wind up’ the company, and redistribute its assets among the businesses it owes money to, and any shareholders.  

Who is affected?

The huge breadth of Carillion’s business, particularly its involvement in large public-sector contracts, will have a huge impact on UK plc. In addition to Carillion’s employees, businesses that it traded with will also be affected. This includes contractors that Carillion is in partnership with on projects, and the wide range of subcontractors and suppliers it used, including consultants such as architects and engineers.

What could the impacts be?

Carillion owes a great deal of money to its subcontractors and suppliers, and this ‘bad debt’ has the potential to cause extensive financial difficulties for them. It is likely to affect their cash flow, which can, in turn, affect a business’s ability to trade profitably. In extreme situations, it can cause subcontractors and suppliers to go into liquidation themselves.

What should I do if my business is affected?

Directors of affected businesses need to understand their personal duties and liabilities in the face of financial difficulties. Because of the unique size, nature and politics of the Carillion collapse, this particular situation may not be straightforward. 

Will I be made redundant?

Employees are often the last to know about liquidation, often because the employer tries to project an image of ‘business as usual’ while it attempts to trade through a financial difficult period. Nevertheless, liquidation is a ‘terminal event’ that will more than likely result in redundancy. Read more about the legal process of redundancies and what you can do about it.

Need some advice?

We’re here to answer your questions if you have been affected. Simply tell us your situation, and we can outline your legal options.

Views & Insights

Carillion: PwC appointed as special managers - what happens now?

Senior Associate, Nat Young comments on what the effects of the Carillion liquidation are likely to be.

Read More
Views & Insights
Scale of Carillion insolvency masks fundamental problems

Carillion’s insolvency has unusual features, not least its political dimension. In other ways, it is simply a familiar story on a larger scale, says Nat…

Read More
Banner Work Life red mug and glasses
Views & Insights
Facing redundancy? Here’s a helpful guide.

The threat of redundancy is unsettling. Employment Solicitor Keely Rushmore outlines what should happen, and what you can do.

Read More
Views & Insights
Carillion: PwC appointed as special managers - what happens now?

Senior Associate, Nat Young comments on what the effects of the Carillion liquidation are likely to be.

Read More
Views & Insights
Carillion Collapse: Legal implications

Nat Young, Senior Associate at SA Law comments in The Construction Index on the impact the Carillion collapse has for the companies it supplies to.

Read More
Views & Insights
Insolvency: What rights need to be considered?

Senior Associate Nathanael Young writes for the Financial Director on Insolvency and the rights which need to be considered.

Read More
Stained glass window
Views & Insights
I'm facing redundancy, what should I do?

A redundancy process is undoubtedly an unpleasant thing to go through, understanding your rights can make things significantly easier.

Read More
Views & Insights
Need to recover a high value debt? Try the insolvency process

Can insolvency be used to recover debt? Senior Associate Nat Young explains how it sometimes can be appropriate.

Read More
Views & Insights
Calling it a day: Why trading too long can be damaging for directors

When is it time to accept the inevitable and stop trading?

Read More
Views & Insights
Using Insolvency as a debt recovery tool

Senior Associate at SA Law Nat Young explains why insolvency can sometimes be an appropriate debt recovery tool

Read More
Views & Insights
Insolvency: When is it time to accept the inevitable?

Even when it is obvious that a company is in financial difficulty, it can be difficult to advise the directors. Most of the time, they will believe they…

Read More
Contact Us

Use our handy contact form to send us your enquiry. We’ll direct it to the right legal expert and respond as quickly as possible. It costs nothing to make an enquiry and it is entirely confidential.

See our privacy notice to find out how we use and protect your data.

Contact Us