Bleak news for 138 creditors in Metro Builders' collapse
THE liquidator of a failed Rockhampton building company has released its report - and it's not good news for the company's 138 unsecured creditors.
Metro Builders ceased trading on June 9, more than six months after becoming insolvent, owing more than $2.4million.
On Tuesday, director and sole shareholder Glen Finning declared personal bankruptcy.
Liquidator Christopher Baskerville from Jirsch Sutherland Insolvency Solutions said data analysis showed cash-flow was "ok" until November 30, 2017 - the date of insolvency - but the company never recovered from then.
He also confirmed that Mr Finning's wife Brenda had owned a house bought by the company in 2015 for $2.5million, but there was nothing suspicious about the transaction, which was made two years before the company became insolvent.
"Our first suspicion was that she had sold the house to the company at an exorbitant price," Mr Baskerville said.
"We believe she ended up about $900,000 better off, but on the alleged settlement day, $900,000 came into the company's bank account.
"She made a profit, but it was immediately reinvested into the company and used so our conclusion was it was not an unreasonable transaction."
An insolvent trading claim of $1.07million has been calculated but with Mr Finning filing for bankruptcy this week, the debt is a civil one.
"It doesn't matter if it's one million or 10million, we don't think there is any money coming out of his personal affairs," Mr Baskerville said.
"We couldn't find any assets in his name so there is unlikely to be any return to any class of creditor from this liquidation.
"The only other source of recovery is to chase a claim against the ATO for unfair preference payment ... but the maximum claim is about $70,000 in total."
The liquidators are yet to confirm with the Australian Securities and Investments Commission whether Mr Finning has committed any offences under the Corporations Act.
"It's clear he has traded while insolvent but I don't think this guy has gone out to deliberately cause harm; instead he's caused harm in his ignorance," Mr Baskerville said.
"Though I do have some concerns about how he accounted for some assets and the motivation for that.
"(Proper accounting) would have led a normal person to make different decisions.
"If the reality was shown to him earlier, he would know that in the past few years he had done nothing but suffer horrendous losses and may have stopped trading earlier.
"I've seen this pattern in a few construction companies feeling pressure from the QBCC.
"I've seen directors do some pretty interesting things in their accounts to preserve their building licence, but I put (Mr Finning) more blissfully ignorant than dishonest."
All 15 Metro Builders staff were stood down before the liquidator was appointed but were paid their entitlements, except superannuation they were owed, under the Federal Government's Fair Guarantee Scheme.
The company had 15 incomplete projects as the registered builder. All were residential homes in Rockhampton and Yeppoon.
Of those, 15 have been assigned to local builders to complete.