Felmeri Group directors given two weeks to finalise rescue bid

The directors of building firm Felmeri Group have been give two weeks to finalise a rescue bid as they look to save the company from falling into liquidation.

The directors of embattled building firm Felmeri Group have been given two weeks to finalise a repayment plan for creditors, as they look to save the company from falling into the hands of liquidators.

About 25 creditors met in Adelaide on Monday where it was decided a second meeting of creditors – where the fate of an insolvent company is typically decided – would be adjourned in order to give directors more time to finalise their rescue bid.

Speaking after the meeting, administrator Leigh Prior said the directors had until July 10 to submit their deed of company arrangement (DOCA) proposal. He would then review the terms of the DOCA and issue a recommendation to creditors ahead of a rescheduled meeting on July 17.

Some of the unfinished homes at O’Halloran Hill. Picture: Keryn Stevens

“I gave creditors a chance to speak and there was no real push-back from creditors to allow for the adjournment,” he said.

“A DOCA may or may not come but there’s no massive downside to adjourning for three weeks. If they (directors) communicate that that’s (DOCA) not going to be the case then we’ll reconvene the meeting, liquidate the company and get things moving.”

It was revealed last week that Felmeri Group director Frank Felmeri was working on a last-ditch rescue bid, claiming to have the support of a mystery building company that would complete most of the unfinished homes left in limbo following the company’s collapse in May.

The identity of the potential white knight has not been disclosed, but is described as a “large national building company” with expertise in commercial and residential construction.

Other terms of the DOCA are expected to include an upfront payment to creditors, excluding those related to the company’s directors.

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.

Felmeri Group, which traded as Felmeri Homes and Felmbuilt Commercial, 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.

While the company’s debts currently stand at close to $10m, including about $7m to unrelated parties, Mr Prior has previously warned that number could reach up to $20m as the fallout for customers is fully worked through with insurer QBE.

Originally published as Felmeri Group directors given two weeks to finalise rescue bid