Debts explode by $5 million as administrators wade through collapsed building company

The debts of a collapsed building company have exploded, with its debt spiralling to $5 million more than original estimates.

The debts of a collapsed building company have exploded, with its debt spiralling to $5 million more than original estimates. Picture: LinkedIn

The debts of a collapsed building company have exploded, spiralling to $5 million more than original estimates.

Last month, Project Coordination (Australia) Pty Ltd went into administration, letting go the majority of its staff and plunging its $120 million worth of projects across NSW and the ACT into jeopardy.

The appointed administrators, Jonathon Colbran, Frank Lo Pilato and Brett Lord of insolvency firm RSM Australia, previously said that preliminary investigations showed that the company owed around $20 million to more than 200 creditors.

But that figure has since grown in the following weeks.

This week, they revealed they had received formal creditor claims which totalled more than $25 million.

The administrators also said they had identified two more building sites impacted by Project Coordination’s demise, bringing the total to 16 large projects left in limbo.

“In addition to the original 14 ‘live’ projects identified — 10 in the ACT and 4 in NSW — we have identified an additional two projects in the ACT, one at design stage and the other where practical completion had not been formally achieved but the owner had already taken possession,” Mr Colbran said.

He also noted that some projects had “ceased” before administrators were appointed, but they were now in discussions with subcontractors to “recommence construction”.

Project Coordination’s debt went from $20 million to $25 million. Picture: LinkedIn

Project Coordination had been in business for 50 years, since 1975, and was run by father and son duo Paul and Gavin Murphy.

Most of the company’s 67 staff were terminated from their employment when administrators took over. Only 12 were kept on to keep operating the company on a skeleton crew.

The company’s two directors said in a statement they were devastated by the chain of events.

“Today we informed our staff of our decision and the painful reality that we would have to let them go,” they said last month at the time the builder went under.

“They were emotional meetings and conversations.

“A quarter of our staff have been with us for 15 years or more, with many over 20 years.”

Paul and Gavin Murphy said they had injected their own money into Project Coordination to keep it afloat but ultimately they had to shut down because they could not source any further outside investment.

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Project Coordination had been in business for 50 years. Picture: LinkedIn

Co-director Paul Murphy, who is 72 years old and has been with the business from the beginning, said he was “devastated”.

“The economic and regulatory environment that building companies are working in now is more challenging than any other I’ve experienced in the past 50 years – worse than the recessions in the 1980s and 1990s and the Global Financial Crisis in 2007/2008,” he said.

“Nothing has been as bad as this.’’

At the time of its demise, Project Coordination had $120 million worth of projects on its books and a further $90 million in the pipeline, ready to start.

The first creditor meeting was held on Tuesday and administrators described the situation as “tough for everyone involved”.

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Originally published as Debts explode by $5 million as administrators wade through collapsed building company