Administrators blame demise of company on dispute with council

The administrators of an infrastructure projects business with an annual turnover of £37m have blamed its insolvency on the outcome of an arbitration of a dispute with a city council.

Administrators at Ernst & Young said DCT Group, which was based in Oldham and employed approximately 100 staff, did not have the resources to pay Liverpool City Council’s legal and other costs arising over the long-running case.

The legal dispute is reported to relate to payment for restoration works at Stanley Park in Liverpool.

Tom Jack, Joint Administrator, said: "DCT Group was a long established engineering business that has been impacted by the outcome of a legal dispute…..[The] Group has insufficient cash flow to fund continued trading and the Directors of the Group have concluded that the Group is insolvent.

“We are therefore working with the Directors and retained employees to try to preserve and sell contracts and maximise asset values for the Group's creditors."

A spokesman for Liverpool City Council said: “We are naturally saddened that DCT has gone into administration and are disappointed that they did not approach us to discuss the situation prior to taking such a drastic step.

“It is regrettable that DCT chose to pursue the city council through arbitration instead of settling the account. However, having chosen to do so, it is only fair that they should reimburse the council’s legal costs (which they appear to accept they are liable for) rather than leaving council taxpayers to pick up the bill.”

The council had noted that the company had made a public statement in relation to proceedings that were not yet concluded, the spokesman said.

“We are unable to comment on the detail of these proceedings but note that DCT recognises that the outcome of its claim is such that it will inevitably have to bear the costs incurred by Liverpool City Council in defending that claim,” he added.

“It would appear from their statements that they will not even seek to suggest otherwise. It follows from this that we certainly do not accept any suggestion that DCT were successful in the arbitration. Beyond this, we are unable to comment this stage.”