A Shropshire building company which was working on a £4 million development in Telford has crashed with debts of £1.2 million, it was revealed today.

Seven jobs have gone following the collapse of Severn Valley Ltd, Bridgnorth, and sub-contractors have also lost work.

Efforts are now being made to repay creditors.

Severn Valley, founded by Jonathan and David Naylor in 2001, went into voluntary liquidation on April 27 and an insolvency firm, Sale Smith & Co of Walsall, is trying to recoup more than £500,000 it says is owed to the firm.

Lee Nolan, of Sale Smith & Co, said Mrs Eileen Sale of his firm had been appointed liquidator, and added: “The company has gone into liquidation as a result of lost contracts, disputes and not being given any new contracts since January 2009.

“As a result, the company has had to make seven employees redundant and finish sub-contractors.

“The company is owed in excess of £500,000 and owes creditors £1.2 million.

“The liquidator will now try to realise any assets available and collect any debts due to the company for the benefit of its creditors, together with her normal administrative duties and an investigation into the conduct of the directors.”

Mr Nolan said that at a creditors’ meeting yesterday the directors said the losses to them and employees were “very much regretted”.

Severn Valley, which manufactured structural steelwork and steel framed buildings, was last working in Telford on a project to build 24 two-bed apartments for David Poyner Homes. Scott Parkes, of David Poyner Homes, in Willenhall, Walsall, said Severn Valley contractors walked off site on April 23.

No-one from Severn Valley was today available for comment.