DOZENS of firms involved in the building of Colchester’s Curzon cinema have been left hundreds of thousands of pounds out of pocket after a contractor went into administration.

Some firms say they have laid off staff after not being paid as much as £144,000 by Ispace Corporate Interiors.

The firm, run by Colchester-based Matthew Diver, was tasked with overseeing the contracts for the new Queen Street venue, which opened in July.

But a month later, administrators were appointed oversee the creditors’ report after a serious decline in cash flow.

Documents seen by the Gazette reveal Ispace now owes more than 100 firms, involved in Colchester’s Curzon and other projects elsewhere in the country, a total of £2.1 million.

It only has assets of £321,000 left, of which £27,000 is set to go to employees.

READ MORE: Staff laid off as contractors count the cost of Curzon build

That leaves just £294,000 to share between companies, which may now only get as little as get 14p in the £1 of what they are owed.

The documents also reveal Ispace had previous financial issues when working on similar cinema projects - but still went ahead with the Colchester scheme.

At the time of going to press Curzon has declined to comment.

The revelation has also angered firms who worked at the cinema, which is now up and running successfully.

Colchester Council championed the long-awaited three-screen cinema as part of the regeneration of the St Botolph’s area and indeed sold the building to Curzon.

Tim Young, deputy leader of the authority and the councillor responsible for business and culture, said although the the situation is “regrettable”, the council and has no jurisdiction over the matter.

Among the companies owed money, who worked at the Colchester Curzon are TDT Enterprises security firm, based in Colchester.

It is owed £5,300, according to the report.

It also states Premier Electrical Southern, based in Grays, is owed £144,000 and Anthony Masters Flooring Specialists, based in Westcliff, is owed nearly £28,000.

Another company connected to Mr Diver, Apples and Chairs, is also owed more than £1,100.

Ispace was formed in 2010 and by its eighth year was turning over more than £8 million.

The documents reveal the firm took on a Curzon Cinema project in Aldgate, London.

The project manager was responsible for choosing sub-contractors, placing orders and budget control.

That project was delivered on time and in budget but then the project manager was put on three more projects.

One of these, Native, made a £25,000 loss.

The administrator’s report said: “Before the end of the Native Design Project and as such before the true extent of the losses were known, both the Craft Central and Curzon Oxford project had started.

“Both projects were subject to significant overspends by the project manager’s firm on site, without any form of approval or forewarning to either the head of operations or to any of the directors.

“The extent of these overspends only came to light towards the ends of the projects as invoices for works completed began to exceed the contract values for the corresponding items.”

The Craft Central project had an expected profit of £225,000 but made a £33,000 loss.

Curzon Oxford was supposed to make an £800,000 profit but made a “slight loss”, according to the report.

Over the pre-Christmas period of 2017, the scale of losses became apparent as the final invoices were received by sub-contractors. The company contacted the Met Police fraud squad and reported the overspend.

Detectives investigated but it was decided not to pursue the case due to insufficient evidence.

The project manager left the firm in November last year and Ispace wanted to take legal action against him but was advised this could not be done against an individual and the financial risks of taking action against his firm could be high.

However, the director secured new funding streams to preserve Ispace’s future and enabled it to take on new projects.

The company traded successfully for a few more months but profits were down between April and July this year and “there continued to be issues with poor pre-contracts estimating and delivery on site from project managers”.

The company was put into administration in July and Nick Cusack, of Parker Andrews, was appointed as administrator in August.

Creditors have been sent the administrator’s proposals and a virtual meeting takes place today at 2pm to discuss the situation.

Mr Cusack also said all creditors will rank equally and will each recover the same percentage of their losses, regardless of the amount owed.

Former employees, however, will have preferential claims.

Matthew Diver was contacted for comment.