Construction contractor fails owing up to $7m

A Brisbane construction contractor that worked with top flight building firms including Hutchinson, McNab and Laing O’Rourke has collapsed with estimated liabilities of $7m.

A Brisbane construction contractor that worked with top building firms including Hutchinson, McNab and Laing O’Rourke has collapsed with estimated liabilities of more than $7m.

Liquidators says Fig Tree Pocket-based Earthmoving Contractors failed due to a multimillion dollar contractual dispute with a client and the impact of lockdowns during Covid-19.

Earthmoving Contractors director Jim Dupuis denied the company owed $7m.

Domenic Calabretta and Mitchell Ball, of Mackay Goodwin, told creditors in a report lodged with ASIC that the company had posted trading losses over the past two years and despite increasing liabilities had used cash to support related entities.

“It appears the company’s revenue and supply chain was significantly impacted as a result of the restrictions and lock downs imposed from the Covid-19 pandemic,” Mr Ball said. “It appears the company utilised cash in order to support related entities who failed to repay the company. Strict use of the company’s cash would have assisted in discharging liabilities.”

The company joins a growing list of construction contractors failing amid worsening conditions in the sector that has seen major operators such as Condev and Probuild go under.

Founded in 2005 by Mr Dupuis, Earthmoving Contractors had worked on high profile projects around the city including DFO Jindalee, Evolution Apartments in Brisbane’s CBD and QUT Creative Industries at Kelvin Grove.

Mr Ball said Earthmoving Contractors had been financially impacted by a contractual dispute over two building projects at Coorparoo. The company won an arbitration claim for $2.2m in additional costs which was then challenged in the Supreme Court by the developer. Further arbitration proceedings have been stayed as a result of the liquidator’s appointment.

Mr Ball in the report said the liquidator had received a deed of company arrangement proposal from the director that could see the firm continue to trade. The proposal will be voted on by creditors at a meeting next Thursday, June 16.

Mr Ball said the arrangement would provide a higher return to unsecured creditors, who are owed more than $2m, and avoid legal costs.