Suppliers impacted by the collapse of ISG have been warned by Build UK that they are unlikely to be paid.
It has published a four-page document of frequently asked questions for suppliers affected by ISG’s collapse.
The guidance, which was written with law firm Wedlake Bell and the Construction Leadership Council, offers a “simplified summary” of how a company administration works and how a contract novation works.
It also explains which ISG companies entered administration and urges companies to check whether they were carrying out work with ISG or as a subcontractor on an ISG project.
The guidance said that suppliers that are owed money by ISG are “very unlikely” to be paid “in the likely event of a subsequent liquidation”.
It added that firms working for subcontractors on ISG projects “legally… should still be paid”, but says that “if companies in the chain are not being paid, this may affect their ability to pay”.
The guidance advises company to stop carrying out any works, explaining that a suspension notice can be issued if companies have not been paid in accordance with their contract terms.
However, it says suppliers should check the termination provisions in their contracts and comply with them if they are considering terminating their contracts with ISG – adding that some tier two contractors may be novated to work for a new tier one contractor.
The full guidance can be read here.
