$80m collapse of Melbourne Cup winner’s building firm hits subbies

The Brisbane-based building firm founded by the former high-flying part-owner of Melbourne Cup winner Vow and Declare is set to sting subbies for millions of dollars.

Subbies and contractors caught up in the $80m collapse of national building firm Lanskey Constructions may not see a cent of their money returned.

That’s the opinion of liquidators combing through the financial wreckage of the building empire founded by Paul Lanksey, the former high-flying part-owner of Melbourne Cup winner Vow and Declare. According to a report to ASIC filed by liquidator Alan Walker, of WLP Restructuring, secured creditors owed about $12.7m may see a return of three cents in the dollar once the liquidation is completed over the next few months.

But Mr Walker said unsecured creditors, including subbies and other contractors, owed more than $63m may not see any return as he winds up the company over the next six to 12 months. “At this stage, it is uncertain what dividend, if any, might be paid to creditors,” said Mr Walker. “I will provide an update to creditors in future reports.”

Lanskey Constructions collapsed in December, leaving 11 projects worth a total of $120m unfinished around the country including the Glenvale Shopping Centre Coles in Queensland, a Cheps Pallets warehouse in Victoria, the Bannockburn Shopping Centre in Victoria, Caltex Halfway Creek in NSW and a superyacht facility in Western Australia. Founded in 1986 by Paul Lanskey and Ross Williams, Lanskey was involved in commercial projects across Australasia with offices in Brisbane, Sydney, Melbourne, Perth and Auckland.

Outside of construction, Mr Lanskey is one of the country’s most successful racehorse breeders with his part-owned Vow and Declare winning the 2019 Melbourne Cup and accumulating winnings of more than $6m during its racing career.

Mr Lanskey told The Australian in 2019 that having dabbled in racehorse ownership as a leisure diversion to the hectic construction trade, he decided to try his hand as a thoroughbred breeder in 2008.

Blake Shinn riding Vow and Declare.

In his report to creditors, Mr Walker said the company blamed its collapse on Covid-19 restrictions, reduced financing, and wet weather in Queensland and NSW. Lanskey also had incurred losses on major projects including Woolworth Dakabin and Coles Glenvale.

Mr Walker said Lanskey’s 53 employees who have lost their jobs as a result of the company’s collapse are owed about $1.4m.

According to a separate report lodged with ASIC by FTI Consulting, the insolvency firm that initially handled the administration of the group, Mr Lanskey provided a signed statement of personal assets and liabilities which indicated he holds net assets of $425,000 including a half ownership of a unit at Norman Park.

The FTI report also noted Mr Lanskey holds a 10 per cent share in Vow and Declare “however we have not yet been able to determine a reliable value for this asset.”

Lanskey’s Queensland building licence was suspended in June 2020 due to the breach of financial covenants but a new licence was granted for the group’s Queensland subsidiary in March 2021, with new Queensland projects contracted through that entity.

Lanskey Construction Qld held a category 5 licence from the Queensland Building and Construction Commission (QBCC) with allowable annual turnover of $120m.

In April 2021, the group entered into a service agreement for the provision of labour hire, finance and other services to the Queensland subsidiary on the basis of cost plus a margin of one per cent. But between mid and late 2021 the company experience cost overruns and difficulties in recovering claims on projects which contribute to losses of $3m.
Covid-19 restrictions from May 2020 onwards had an impact on operations particularly at the $24m Bannockburn Shopping Centre north of Geelong.
In 2022, the company reported a net loss of $6.2m. The liquidation of Lanskey Constructions in October last year following the suspension of its building licence caused “contagion effects” on the ongoing trading of the company.

The building industry has been hit by a perfect storm of labour shortages and material price hikes in the past two years that has seen the demise of major builders including Probuild, Condev, Privium Homes and Pivotal Homes.

Lanskey had worked on supermarket, retail and restaurant developments for some of the nation’s biggest brands including Woolworths, Coles, Starbucks, A-Mart and Myer.

According to financial report lodged with ASIC, Lanskey Constructions made a loss of $218,000 on revenue of $139.7m in the 12 months to the end of June 2021. That compared to a profit of $177,000 on revenue of $134.9m the previous year.

Comment has been sought from Mr Lanskey.