Insolvencies in Queensland jump 59 per cent in June with builders and hospitality worst hit

Builders and hospitality firms among more than 640 Queensland companies that went into liquidation or administration over the past year. See the latest list of June insolvencies.

The number of Queensland insolvencies surged 59 per cent in June with construction and building services companies among the high profile casualties amid concerns that the Covid-19 lockdown will spark more collapses.

A Brisbane construction business that helped roll out the Taco Bell chain in Australia and two companies controlled by the founder of the Hollywood Showgirls gentlemen’s club were a couple of the high profile Queensland businesses that were wound up in June.

They were part of list of 73 Queensland companies that had liquidators or administrators appointed in June, compared to 46 in May which was an almost 59 per cent rise. In June last year there were 63.

In the year to June 30, there were 644 liquidations or administrator appointments of Queensland incorporated companies. The busiest month was 84 insolvencies in February.

Revive Financial liquidator Jarvis Archer said Covid-19 and lockdowns remained a threat to many struggling businesses.

“Business owners impacted by Covid-19 now have to deal with significant arrears as well as trying to meet ongoing rent payments, despite reduced turnover.,” he said.

“While there have been mixed responses from landlords toward impacted businesses, now rent relief has ended, landlords are looking to recover arrears and return tenants to complying with lease agreements.

“I believe the new wave of lockdowns across the country will see further impact on already struggling businesses. With no further Federal Government stimulus expected, it appears up to the states to determine what, if any, financial support they will offer.”

Mr Archer said various sectors remained heavily impacted by the pandemic particularly hospitality, international tourism and entertainment, while the construction industry was becoming a victim of its own success.

“For hospitality businesses that have seen trade recover, reduced staff availability has led to increased overtime for existing staff, driving up costs and reducing profit margins,” he said.

“Meanwhile, significant delays and price increases for building materials are causing serious difficulties in the construction sector.”

Last month Verus Construction that helped roll out the Taco Bell chain in Australia collapsed after a series of disputes with subbies over the past three years.

The Victorian Supreme Court appointed liquidators to Teneriffe-based Verus Construction after a winding up application from one of the company’s creditors.

Verus, launched by sole director Greg Johnson in 2017, has been enmeshed in a number of ongoing legal battles related to the redevelopment of the Inala Civic Centre after being damaged by fire in 2017.

A building adjudicator in February ordered that Verus pay $352,000 to one of its subbies working on cladding and interior work at Inala Central.

High profile builders and construction companies go into liquidation.

Slacks Creek-based Total Blox provided block laying and concrete pumping services to builders and developers of commercial and residential projects wnet under owning more than $2m.

Travis Pullen, of BT Advisory, has been appointed liquidator of the company that was previously known as Tony Alex Bricklaying. Mr Pullen has told creditors that the company owed creditors an estimated $2.4m including more than $1m to the Australian Taxation Office.

Looking at hospitality fast food chain FantAsia collapsed after failing to recover from last year’s pandemic lockdown.

The chain, which operated eight cafes in high-profile shopping centres around Brisbane, started in 2012 offering modern takes on traditional Asian dishes including Singapore Noodles, Beijing Zha Jiang Noodles and Penang Curry Chicken.

Michael Dullaway and Mark Pearce, of Pearce & Heers, were appointed liquidators of Signature Chef and Signature Mark, the two companies that operated the chain.

Two companies controlled by the founder of Hollywood Showgirls Craig Duffy go into liquidation.

Liquidators were also appointed to two companies controlled by Gold Coast nightclub king Craig Duffy, the founder of the Hollywood Showgirls gentlemen’s club.

When contacted Mr Duffy said the Hollywood Showgirl business remained operational and the company in liquidation was a non-trading entity. The company had entered creditors voluntary liquidation, which involved the liquidator selling equipment, stock, plant and other property to pay creditors.

Mr Archer said the limited recovery action by the Australian Taxation Office has previously been noted as the key factor in the low number of insolvency appointments.

“This generally remains the case. While the ATO has increased their contact with business owners about ensuring their lodgement and payment obligations are up to date,” he said.

“The ATO has only commenced six court wind ups since 1 July 2020, two being this month. By comparison, more wind ups were commenced in February 2020, just prior to the Covid restrictions. These numbers pale in comparison to the 100 to 150 monthly wind ups seen regularly in 2019.

“That said, the ATO has been actively issuing director penalty liabilities for unpaid company superannuation.”