When Giants Fall and the JV Partners Pick Up the Pieces
Carillion was a giant among construction companies. As the second biggest construction company in the UK, with annual revenues of £5.2bn and a workforce of over 45,000 people, many would have thought that they were too big to fall.
The Carillion world came tumbling down on the 15th January 2018 for the unfortunate employees, sub-contractors, partners and suppliers when the company entered compulsory liquidation.
Many have expressed justifiable fear over the knock-on effect on projects that Carillion were commissioned to construct and build.
Were assurances put in place to ensure continuity in the event of the Carillion collapse?
Carillion were recently awarded a series of contracts to develop major transportation infrastructure projects.
One project was two HS2 deals worth over £1.34bn.
The joint venture on this project was made between Carillion, Kier Group and Eiffage SA. All partners were forced to provide assurances that they could step in to deliver the project on time if one of the other partners collapsed.
On a practical point, it will be interesting to see what measures were taken by the group to place the Carillion technical data, engineering drawings, blueprints, source code and software into some sort of escrow or joint repository prior to the collapse.
When the noise subsides, experience will show that joint ventures that prepare themselves adequately when times are good are better prepared with their contingency plans when the unexpected occurs.
About Escrow London
Escrow London provides simple and cost-effective software and technical escrow solutions to its clients globally. The founders of Escrow London have a strong track record in global data protection, information management and intellectual property law. Escrow London advises JV groups to ensure their exposure from a technical and IP perspective is limited in the event one of their partners collapse.