Court reprieve for Roberts Co administrators to strike deal with Victorian developers

Administrators of the collapsed Victorian arm of the building company have been given three weeks to try and strike a deal with developers to get workers back on major sites.

A new Amazon facility will be opening in Craigieburn it was recently announced.

The administrators of the collapsed Victorian arm of Andrew Roberts’ building company, Roberts Co, have won a reprieve as they work to salvage the company’s operations.

Administrators McGrathNicol have been granted orders in the Federal Court giving them time to win over key developers and get workers back on sites, including one of the country’s largest under-construction Amazon facilities.

The court orders mean the administrators are not personally liable for rent or other amounts under Roberts Co’s leases or agreements for third-party property for a period of three weeks.

The ruling gives McGrathNicol breathing space ahead of a planned creditors meeting on Wednesday, with other documents showing that problems were emerging in the Roberts Co building empire in mid-February.

While Roberts Co (Vic), which had major residential, commercial and industrial projects across Victoria, called in administrators on March 14, there were meetings involving the tycoon held about its future weeks earlier.

Minter Ellison partner Caitlin Murray, advising ARFT Nominees Pty Ltd, which counts Mr Roberts as a director, and is the ultimate shareholder of Roberts Co’s Victorian arm, contacted McGrathNicol partner Jason Ireland on February 18.

Plans for the 130 Little Collins Street development in Melbourne by Golden Age Group.

Ms Murray advised that ARFT had concerns in relation to the cash flow challenges faced by the overall Roberts Co business and particularly in relation to its Victorian subsidiary.

Further meetings were held between Mr Roberts and his advisers, Roberts Co, chair George Kostas and managing director Emma Shipley, and lawyers from Ashurst.

Roberts Co’s Victorian unit was undertaking four major construction projects, including Golden Age’s 28-storey office building at 130 Little Collins Street, in Melbourne’s CBD, a build-to-rent project for Oxford in Footscray, and the huge 209,000sq m Amazon distribution centre in the suburb of Craigieburn.

It was also working on three smaller building projects at schools in Victoria and on defect rectification work on projects it had already completed, but are still inside their contractual defects liability period.

Federal Court Justice Penelope Neskovcin said in a judgment that the administrators “are in discussions with the principals of the major projects in relation to potential works continuation agreements”.

“The outcome of those discussions might be that the administrators will be able to reach agreement with the principals in relation to a funding arrangement pursuant to which Roberts Co (Vic) may be able to continue to undertake the works on the major projects,” Justice Penelope Neskovcin wrote. “Another potential outcome is the novation of the works contracts to another contractor.”

A render of the Amazon centre in Craigieburn. Picture: supplied

The judgment said the administrators believe that if they can reach agreement with any of the principals in relation to a works agreement that would “substantially reduce” the claims by the principals against Roberts Co (Vic).

The judgment said this would also preserve value in the business and ensure employees, trade creditors and subcontractors can continue to be paid to complete projects, which would in turn reduce the number and quantum of claims against the Victorian unit.

The administrators won extension until April 11 to allow them to progress the work agreements, assess the prospects of novating works contracts, and conclude talks with lessors or owners of third-party property that may be required for works to restart.

Originally published as Court reprieve for Roberts Co administrators to strike deal with Victorian developers