Felmeri Group rescue plan rejected, liquidators appointed

Felmeri creditors have rejected a last-ditch bid to revive the controversial building firm, appointing liquidators to wind it up after months of uncertainty.

Felmeri customers Neoklis Nicolaou, Jessica Harrison and Thomas Craig Davies. Picture: Russell Millard Photography

Customers and creditors of Felmeri Group have rejected a last-ditch bid to revive the controversial building company, appointing liquidators to wind it up after months of delays and financial uncertainty.

The appointment of liquidators at a creditors meeting on Monday means the company’s assets will now be sold off in a bid to recover funds for creditors left close to $30 million out of pocket.

Further investigations into the company’s activities in the lead up to its collapse will also be undertaken by liquidator Leigh Prior of Agile Business Advisory.

The latest estimates suggest creditors can expect a return of up to 2 cents in the dollar, but that figure could be higher if liquidators are able to generate additional recoveries following their investigations.

Close to 50 creditors met in person and virtually on Monday morning to decide Felmeri’s fate, including Jessica Harrison, who voted to put the company into liquidation.

“I’ve been waiting for this for a very long time now – I feel relieved in the sense that it’s a step closer to getting our houses sorted and moving on,” she said.

Unfinished houses at O’Halloran Hill. Picture: Keryn Stevens

“I’m doing this on my own, financially, and it’s been a big burden, especially given that since December 2021 my house has been basically completed. It has been sitting there and sitting there because the road hasn’t been done – there’s no services into or connected to my house.”

Ms Harrison was one of more than 20 Felmeri customers at a O’Halloran Hill development, which stalled once the company fell into administration on May 19.

While the appointment of liquidators means customers can now complete their projects independently through insurer QBE, there is still uncertainty over the O’Halloran Hill development given a key roadway into the estate was being managed by a related but separate entity to Felmeri.

Felmeri’s directors Frank Felmeri, and his son, also named Frank, lobbed a last-ditch rescue plan to creditors last week, promising a $3 million injection of capital into the business from an unnamed third party.

They were promising to complete construction of the road, and hoped to re-enter contracts with 37 customers at a Bowden townhouse development.

Felmeri customer Thomas Craig Davies said he was relieved creditors rejected the plan, but said the unfinished road at O’Halloran Hill remained the “biggest issue” for homeowners in the estate.

“Most of us are first homeowners with young families – we’re probably all under 30 or under 40,” he said.

“We’re thankful we’ve got the insurance money because we’re going to use a lot of that to get the homes to standard.

“But this is just one stepping stone to getting into our houses – there’s still a few more challenges ahead of us.”

Another O’Halloran Hill customer, Neoklis Nicolaou, was hopeful insurance would cover the cost of repairing defects and completing construction of his house.

“This was our first home – we got married in June and we we’re hoping to move in and

it didn’t happen,” he said.

“Now it will be another six months to a year and it’s already been two and half years, so by the time we get in there it will be three-plus years.”

Mr Prior said his focus would turn to maximising the return to creditors who, according to latest estimates, are owed $25-$30 million.

“There are significant amounts owing to the company by its directors and related entities, and the recovery of these is a priority,” he said.

“My investigations into the affairs of the company will also continue, with relevant matters reported to ASIC, CBS and other regulatory bodies as appropriate.”

A report into the company’s affairs prepared by Mr Prior following his appointment as administrator revealed Felmeri may have been trading insolvent since June last year, with several other potential offences listed for further investigation.

Felmeri fell into administration on May 19, following a string of complaints around claims of poor workmanship and lengthy delays that prompted an investigation by CBS. About 120 customers were affected, either left with unfinished homes, or having contracts for building projects yet to commence.

Treasurer Stephen Mullighan was unavailable for comment.