Felmeri collapse: Building firm pulls out of rescue plan

Felmeri Group has lost the support of a national building firm for its last ditch rescue plan as estimates of the company’s debts surge past $20m.

A local SA builder is working on plans to take over unfinished building projects left in limbo following the collapse of Felmeri Group. Picture: Keryn Stevens

Embattled building company Felmeri Group has lost the support of a national construction firm for its last-ditch rescue plan, while estimates of the company’s debt pile surge past $20m.

In a letter to creditors last week, administrators confirmed the unnamed national firm had advised it would not be party to a deed of company arrangement (DOCA) proposal being prepared by Felmeri’s directors Frank Felmeri and his son, also named Frank.

However it was also revealed the Felmeris were still hopeful of finalising a DOCA proposal by Monday, and was in talks with a “large South Australian based builder with significant resources and capabilities”.

“Although I have not been provided with any specific information regarding this potential DOCA, I have recently been advised that the ‘New DOCA Builder’ is a large South Australian based builder, with significant resources and capabilities,” administrator Leigh Prior of Agile Business Advisory says in the letter.

“A DOCA proposal would likely include the completion of certain existing building projects.”

Mr Prior told The Advertiser he was expecting a DOCA to be submitted for his consideration on Monday ahead of a vote of creditors on July 17.

Frank Felmeri at Northgate. Picture: Bianca De Marchi.

Photos of the Wallaroo Shores resort development before Felmeri’s collapse in May.

He also revealed estimates of Felmeri’s debts had ballooned to more than $20m.

“The shortfall on home building projects and commercial projects is higher than initially estimated and is likely to significantly exceed $20m,” he said.

The Advertiser understands the company’s biggest creditor, Monopoly Property Group, is now claiming it’s owed close to $10m for incomplete construction work at its Wallaroo Shores resort development on the Yorke Peninsula, up from an initial estimate of just $1.1m.

It was revealed last week that Melbourne property magnate Ross Pelligra was in talks with Felmeri about taking over certain incomplete projects, while local home builder Metro Homes SA had submitted 16 quotes to complete projects for former Felmeri customers.

The Felmeris have until Monday (July 10) to provide their DOCA proposal to Mr Prior, who will then provide a recommendation to creditors ahead of the vote set down for July 17.

If a DOCA is approved by creditors, control of the company would return to its directors. Otherwise the company could be placed into liquidation, with its assets sold off in a bid to recover funds for creditors.

Close to 120 customers have been left in limbo since Felmeri fell into administration on May 19.