When news broke about the liquidation of operations at Prax Lindsey Oil Refinery, it sent shockwaves through Lincolnshire and beyond. For decades, the refinery had been a major employer and a central part of the local economy. The announcement that work would wind down and that many jobs were at risk left hundreds of families, small businesses, and entire communities concerned about what comes next.
In this blog, we look at how liquidation impacts not just the company itself, but the wider ripple effect it has on workers, nearby towns, and regional suppliers. We also explore what options are available to businesses and workers affected by such large-scale shutdowns and how Simple Liquidation helps make sense of the process.
What Happened at Prax Lindsey?
Lindsey Oil Refinery, located near Immingham in North East Lincolnshire, has been a landmark facility since the 1960s. It has played a major role in the UK’s fuel production, handling crude oil refining and supplying petroleum products across the country.
Owned by the Prax Group, the site came under scrutiny in mid-2025 after operational challenges and global market shifts placed pressure on its viability. Eventually, the decision was made to wind down refining operations, which included initiating a formal liquidation of part of its operational structure.
For many employees and suppliers, the news came as a blow. While parts of the Prax Group may continue trading, the direct impact of the liquidation at Lindsey has left significant uncertainty.
The Immediate Impact on Workers
One of the most serious consequences of any liquidation is the loss of jobs. At Prax Lindsey, hundreds of highly skilled workers were affected. These include engineers, technical staff, administrative teams, security personnel, contractors, and shift supervisors.
Redundancy, especially when unexpected, can be emotionally and financially devastating. For workers who have spent decades at one employer, the transition is not just about finding new work but also dealing with the shock of losing their workplace community and identity.
If you are an employee affected by company liquidation, you may be eligible to claim:
- Redundancy pay
- Unpaid wages
- Holiday pay
- Notice pay
These claims are often processed through the Redundancy Payments Service, a government-backed scheme. At Simple Liquidation, we support employees and directors in understanding how to access this support and what steps to take if payments are delayed or unclear.
Impact on Local Businesses
Beyond direct employment, Prax Lindsey supported a wide ecosystem of suppliers, local contractors, delivery firms, equipment providers, and small businesses. When a company of this scale goes into liquidation, the ripple effect is felt far and wide.
Local businesses that provided services such as cleaning, maintenance, transport or hospitality may suddenly find unpaid invoices stacking up with little hope of being recovered. Many of these businesses rely on timely payments to manage their own cash flow.
We often see smaller firms go under themselves after being caught up in the fallout from a larger company’s collapse. If this sounds familiar, it is essential to seek advice early. There are options available before the situation becomes critical.
Pressure on the Local Community
The impact of liquidation goes beyond numbers on a spreadsheet. When a major employer closes, the community loses a source of stability. Job losses lead to reduced spending in local shops, pubs, cafés and other services. Housing demand might fall. Support services such as job centres and food banks come under more pressure.
For communities in rural or coastal areas where there are fewer alternative jobs, the situation can quickly become long term. Younger people may move away in search of work, which has knock-on effects for schools, housing and future investment.
While there is often little that local people can do to stop a liquidation once it is in motion, being informed and knowing where to find help makes a real difference.
What Happens During Liquidation?
When a company enters liquidation, a licensed insolvency practitioner is appointed to manage the process. Their job is to:
- Identify and sell off company assets
- Pay off creditors in a legal order of priority
- Handle employee claims
- Close down the company properly
For workers, this often means receiving letters confirming redundancy and instructions on how to claim what they are owed. For suppliers and creditors, it means submitting formal claims and waiting for updates.
The process can take months, depending on the size of the company and complexity of the situation. In the case of Prax Lindsey, the scale of the operation means the wind-down is likely to be managed in phases.
What Should Affected Businesses Do?
If your business supplied goods or services to Prax Lindsey and you are now struggling with unpaid invoices, it is important not to wait.
Here are a few steps you should take:
- Gather all outstanding invoices and contracts
Make sure you have full documentation of what you are owed.
- Submit a creditor claim to the appointed insolvency practitioner
Even if recovery is uncertain, it is important to register your interest officially.
- Review your own cash flow
Assess whether the unpaid debt puts your own business at risk.
- Speak to a licensed insolvency practitioner
If you are concerned about your own company’s future, get advice early. There may be ways to restructure, reduce costs or close the business in an orderly way.
Simple Liquidation works with business owners in exactly these situations. We understand the pressure and offer clear, practical steps tailored to your circumstances.
Support for Directors and Staff
Directors of affected companies may also face tough choices. If your firm relied on contracts with Prax Lindsey and is now struggling to stay afloat, you are not alone.
Many directors find themselves in a difficult position. You may be considering:
- Whether to keep trading
- How to reduce staff
- Whether liquidation or administration is the right option
- How to protect yourself from personal liability
We can help with all of these questions. Our licensed insolvency practitioners have over 30 years of experience helping business owners close companies properly, meet legal duties, and plan their next move.
A Way Forward
While the closure of Prax Lindsey operations is a significant loss for the region, it also highlights how interconnected businesses are. One liquidation can have a domino effect that spreads across industries and communities.
That is why it is so important to plan ahead, seek advice early and understand what support is available. Whether you are an employee, supplier or director, there are steps you can take to regain control.
Simple Liquidation is here to support you. We are not a broker or sales company. We are a team of experienced, regulated professionals who deal directly with directors and individuals affected by business closure.