The collapse of ISG leaves suppliers facing uncertainty over unpaid dues.
- Build UK releases vital FAQs, warning suppliers of likely unpaid invoices.
- Guidance prepared with legal experts outlines implications of administration.
- Suppliers urged to review contracts, assessing termination and novation options.
- Supply chain disruptions anticipated, affecting payment flows through tiers.
In the wake of ISG’s collapse, suppliers associated with the firm are bracing for significant financial uncertainty. Supplied by Build UK, an informative document now warns involved parties about the improbability of receiving payment for outstanding invoices, based on a likely scenario where ISG undergoes liquidation. This guidance has been crafted by Build UK, in collaboration with the Construction Leadership Council and law firm Wedlake Bell, to elucidate the complex processes involved in company administration and contract novation.
Build UK’s document serves as an essential reference for suppliers, providing a comprehensive overview of the companies within ISG that have entered administration. The guidance emphasises the importance for suppliers to verify their specific contractual arrangement with ISG, distinguishing whether they were directly engaged or acted as subcontractors on ISG projects.
A key point in the guidance states that firms engaged with ISG as subcontractors ‘legally… should still be paid’, notwithstanding potential liquidity issues within the payment chain. This advisory underlines a critical risk: if entities higher in the contractual chain are not receiving remuneration, it may hinder their capacity to finance lower-tier payments.
Moreover, suppliers are advised to halt ongoing works pending payment, with the provision that they can issue a suspension notice if dues are unmet per contractual terms. However, Build UK strongly advises consulting the termination clauses in current contracts as an essential step prior to ceasing operations. There exists a potential opportunity for some subcontractors to be novated to work with a new tier-one contractor, offering a possible route to financial remediation.
While the document extends necessary information, the broader implications of ISG’s insolvency may ripple through the supply chain, posing further financial challenges. The advisory details are pivotal for affected suppliers in navigating their available options, maintaining vigilance in contract management to preserve financial stability.
The collapse of ISG poses significant challenges for its supply chain, demanding strategic contract management from suppliers.
