Builder collapse leaves shocking level of unpaid creditors
MORE than 300 unsecured creditors have been left owed millions of dollars after the liquidation of Sunshine Coast builder Ri-Con Contractors Pty Ltd.
The collapse of the company has renewed calls for the swift introduction of Project Bank Accounts, as part of the State Government's commitment that subbies would be paid in full, on time and every time.
Peregian Beach-based Ri-Con Contractors was engaged in work for Gympie, Noosa and Sunshine Coast councils when it closed its doors on Monday owing $968,000 to secured creditors and a further $3.4m to unsecured creditors, mainly subcontract small businesses.
The builder held a Category 3 Queensland Building and Construction Commission licence allowing a turnover of $12 million to $30 million annually.
Liquidator Paul Nogueira said money owed to unsecured creditors included $1.2 million in retentions, $1.1 million outstanding for 90 days and more and $1 million owed in current 60-day invoices.
In terms of assets around $1.6 million included debtors of the company, stock, plant and equipment.
The company, headed by director John Jenkins, was also owed $1.4 million in related-party loans.
Mr Nogueira said he had yet to determine the extent of money owed to direct company employees.
He said he would have an initial report out today with a summary of the company's affairs.
He said a detailed statutory report to creditors would be available within three months' time.
"I'm yet to understand why the company is in the hole it's in," Mr Nogueira said.
"We're looking at the profit and loss figures."
He said on rough gross figures the company was $1.7 million short on the books.
"The director indicated there had been difficulties in the business for a long time in winning business and securing appropriate margins," Mr Nogueira said.
"This one's not pretty at all."
The biggest unsecured creditor was owed $250,000.
There were 200 creditors who were each owed under $10,000, a further 100 who were owed between $10,000 and $50,000 and 15 to 20 creditors owed from $50,000 to $250,000.
Subcontractors Alliance head Les Williams said the Queensland Government's evaluation panel needed to bring in immediately legislation requiring Project Bank Accounts to protect subcontractor payments.
He said plans for a phased roll out should be scrapped.
"This sort of thing will continue to happen until they are brought in," Mr Williams said.
"Builders have known they (Project Bank Accounts) were coming.
"If not fully introduced by the state election in October, despite the hard work that's been done and the good will, it will represent a broken election promise."
Mr Williams, who has fought for security of payment legislation since the 2013 Walton Queensland liquidation, also questioned why local councils weren't already embracing Project Bank Accounts for work they tendered.