A NORTH-EAST building company has gone into voluntary administration with debts of more than £800,000.

But creditors of Hyperion Project Management, of Durham, are being asked to agree to a rescue package.

Insolvency practitioners acting for the company have called a meeting of more than 200 creditors on Monday.

Directors Dave and Steven Lines are proposing a Company Voluntary Arrangement under the Insolvency Act, which would allow them to carry on trading - but they would pay out just 38p in every £1 owed to creditors.

In a document seen by The Northern Echo, they said they had "come to the conclusion that the company is insolvent and unable to pay its debts as and when they fall due.

"Having reviewed a number of alternatives, we are of the opinion that a Company Voluntary Arrangement is likely to give a greater return to creditors than the other options open."

The document, issued by insolvency practitioners at Tait Walker, of Newcastle, says the company has negligible assets apart from office equipment.

It is a member of the Hyperion Group, with offices in Finchale Road, whose website lists developments throughout the region.

Earlier this year, Hyperion Homes started work on a £5m development at the former St Anne's School, in Wolsingham, County Durham, where it was given planning permission to convert the school building into ten executive homes and build 34 houses and flats in the grounds.

A £1m luxury development at Barton, near Richmond, turned sour in January when a drain installed for five bungalows failed to meet required standards and North Yorkshire County Council refused to adopt the roads.

The dispute is still unresolved, leaving prospective buyers in the lurch.

The company, which was formed in 2002 and employs its own workforce instead of using sub-contractors, has experienced a number of problems.

According to Tait Walker's document, it experienced problems on a number of projects and lost money through inefficiency, delays and lack of control over purchasing.

At one development, irreparable damage was caused to the structure of a listed building conversion and a local authority rescinded planning permission, delaying the contract for eight months.

Monday's meeting takes place at 10.30am at the Marriott Hotel, Gosforth Park, Newcastle.

Hyperion was not available for comment last night.