A Sydney building firm has become the latest to join a long list of failed construction companies.
Grover Constructions, a small residential builder in the Sydney metropolitan area, went into voluntary liquidation in September.
Last week, a new liquidator was appointed, at the request of the firm’s largest creditor.
The new appointee, Bradd Morelli of insolvency firm Jirsch Sutherland, told news.com.au that early investigations have put the debt at $647,000 at least.
That includes a $400,000 debt from a court order, an employee owed around $5000 in unpaid superannuation and a law firm owed $1200.
There are also several related debts — which is when the people running the company are owed money from the entity. That includes the director of Grover Constructions, owed around $125,000 from unpaid employee entitlements, as well as a $95,000 debt and a $21,000 one from other lenders owed money.
Nothing appears to be owed to the tax office so far.
The largest creditor claims their $400,000 debt is actually closer to $1 million.
Mr Morelli said the $647,000 debt figure will likely change as he investigates further.
“I don’t know what that number will ultimately be, these are the numbers the directors put forward,” he told news.com.au.
For instance, the firm’s biggest creditor has lodged a proof of debt claim for $1 million over a court case judgment, while the director has put it at $400,000.
Grover Constructions reportedly collapsed because of this expensive lawsuit that didn’t rule in the company’s favour.
“It’s not your typical failed building company, it would appear it’s been done off the back of litigation,” Mr Morelli explained.
The legal case went for a number of years in the Supreme Court, Mr Morelli understands.
News.com.au contacted the company’s director for comment.
Darren Vardy of SV Partners was previously the liquidator.
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A spate of construction companies have collapsed this year with more than a dozen failing caused by a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, and extreme weather events.
Earlier this month, news.com.au reported on Tozer Construction Group, based in Canberra and country NSW, which went bust owing at least $1 million and leaving a trail of angry customers and staff in its wake.
Then there was Melbourne-based company Blint Builders that collapsed with approximately $1.4 million in outstanding debt owed to 50 creditors, according to the liquidators. On Thursday, revelations came to light that the company hadn’t operated a bank account in its own name for five years.
Last month, Brisbane-based builder Lanskey Constructions QLD went into liquidation.
In August, major Queensland residential builder Oracle Platinum Homes went into liquidation owing $14 million and impacting 300 homes, 200 suppliers and subcontractors and 70 staff members who were made jobless.
Another Queensland builder, Besse Construction, collapsed the same month owing $1.7 million.
Industry giant Gold Coast-based Condev also went into liquidation earlier this year.
In July, Snowdon Developments was ordered into liquidation by the Victorian Supreme Court with 52 staff members, 550 homes and more than 250 creditors owed just under $18 million.
Others joined the list too including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes, Statement Builders and Langford Jones Homes.
Plus there was NSW building company Willoughby Homes, which went into voluntary administration, leaving at least 30 homes in limbo.
Also shuttered was Norris Construction Group, which was in Geelong, collapsing in March with $27 million in debt. It owes $3.2 million to around 140 staff that it is unlikely to be able to repay, according to the liquidator’s report.
Story Credit: news.com.au