Stokes Wheeler owes almost $20m to creditors and staff, no money in project accounts, report claims

Administrators have revealed a veteran Gold Coast building company owed almost $20m when it went into administration last month. Read how much was in trust accounts meant for subbies

Administrators have revealed a veteran Gold Coast building company owed almost $20m when it went into administration last month, with unsecured creditors unlikely to see a cent if it’s tipped into liquidation.

The report, lodged with ASIC, said employees of Stokes Wheeler were owed up to $1.66m, while unsecured creditors were thought to be owed more than $13.5m.

There were debts to secured creditors of $3.2m – mostly to Westpac.

While the company operated six project trust accounts – intended to protect money owed to subcontractors and suppliers – all had a nil balance when administrators were appointed.

According to the report, the company’s retention account – also intended to pay company debts – had a shortfall of $2.7m and had consequently been frozen by the Queensland Building and Construction Commission.

Meanwhile, the company itself claims it’s owed more than $5.3m in retentions held by developers, some of which are refusing to pay up because of rectification and termination concerns.

Less than 10 per cent is considered “realisable” by the administrators.

Stokes Wheeler, which has offices in Yeronga and Southport, went into voluntary administration on February 3, with Roland Robson and Bill Cotter appointed.

Artist impression of the Elevaire project at Palm Beach on the Gold Coast.

Work stopped on four projects under construction, including a 40-apartment project Elevaire at Palm Beach by developer Evoke Property, which has lodged a debt claim of $6.49m with the administrators for “termination and rectification costs”.

Other projects under way included the Bounce Hostel at Pine Ave, Surfers Paradise; a medical centre at Dixon Circuit, Pimpama; and an aged care facility at Calam Road, Sunnybank.

Contracts for all four have been cancelled, with their developers on the hunt for new builders.

The administrators’ report said the company had been under financial pressure for five years, enduring multiple loss-making projects and eroding its assets.

Stokes Wheeler is directed by Damien Stokes and John Wheeler, who each have more than 30 years experience in the building industry.

Creditors were told the directors were working on a Deed of Company Arrangement (DOCA), aimed at preventing liquidation.

The Gold Coast Bulletin has contacted the directors for comment.

Damien Stokes of Stokes Wheeler.

John Wheeler of Stokes Wheeler, which is in administration.

Although the directors did not disclose any vehicles owned by the company, the administrators said Stokes Wheeler actually had a loader, forklift and multiple passenger vehicles.

Their report said Westpac had secured debt of $2.97m, but also had overdraft and bank guarantee facilities worth another $2.02m.

That debt is secured by properties owned by the company and personally by its directors.

According to the administrators, further investigation was needed into the discharging of a debt to a related party, and that their “preliminary investigations indicate that it is suspected that the Company did trade while it was insolvent”.

No action has been taken against the company or any individuals.

Screenshot from website of Stokes Wheeler, which is in voluntary administration.

The administrators recommended creditors vote in favour of liquidation, because the “somewhat complex” DOCA was still a draft, but said their view was likely to change once it was finalised.

The creditor meeting scheduled for March 10 will be adjourned for three weeks to enable the DOCA to be finalised, the administrators said.

The costs of the voluntary administration were $110,974, creditors were told, while another $30,000 would be needed if a DOCA was approved or another $50,000 in the event of a liquidation.

Originally published as Stokes Wheeler owes almost $20m to creditors and staff, no money in project accounts, report claims