BA Murphy collapses owing $3m, hundreds of unfinished homes

Another major building company has folded leaving hundreds of home owners in three states in the lurch and subbies owed millions of dollars.

Another major building company has collapsed leaving hundreds of home owners in the lurch and subbies owed millions of dollars.

FTI Consulting liquidators moved to take control of BA Murphy Constructions on Tuesday ending weeks of uncertainty over its future.

According to documents lodged with ASIC, the company’s directors had “formed the view that the company was insolvent and unable to pay its debts when they became due.”

BA Murphy had signed or taken deposits on about 240 residential contracts with another 50 projects under way on site. It also has 11 commercial contracts under way. About 100 customers are affected in NSW, 154 in Queensland and 35 in Victoria.

The failure of BA Murphy, which is based on the Sunshine Coast in Queensland, comes a month after the collapse of another major Queensland builder Privium Homes impacted 2000 homes owners around the country. Creditors agreed on Wednesday to put the Privium companies into liquidation.

The BA Murphy collapse follows weeks of speculation the company was facing financial stress in the weeks leading up to Christmas.

The Queensland Building and Construction Commission (QBCC) earlier this month suspended the firm’s licence after complaints it was not paying subbies on its various projects around south-east Queensland.

The troubled firm has abandoned millions of dollars worth of projects after the loss of the licence.

One of BA Murphy's abandoned projects.

The firm had earlier told subcontractors it was exiting all its commercial projects including townhouse developments in Brisbane, Caloundra and Sippy Downs.

BA Murphy, founded by third-generation builder Ben Murphy in 2016, is arranging for developers to take over the sites and “working out what needs to be done to complete the projects.” Industry sources say the company could owe up to $3m.

According to QBCC records, BA Murphy completed 98 projects worth $30.7m in 2020/21 and 100 jobs worth more than $27.5m the previous year. However, so far this financial year it had only completed three jobs worth $1.1m.

BA Murphy founder Ben Murphy comes from a multi-generational family of builders and has more than 20 years’ experience in the sector. BA Murphy joins a growing list of building companies struggling with rising material and labour costs due to the Covid-19 pandemic. Comment had been sought from Mr Murphy.

FTI Consulting’s John Park and Ben Campbell were appointed liquidators of BA Murphy Constructions and related companies in New South Wales and Victoria, BA Murphy Constructions (NSW) Pty Ltd and BA Murphy Constructions (VIC) Pty Ltd.

FTI said that following the appointment, control of the companies’ business, property and affairs now rested with the liquidators.

“The liquidators are assessing the business and will be working with affected employees, creditors, clients, regulators, and other stakeholders directly,” FTI Consulting said.

Creditors on Wednesday voted to place the Privium group of companies into liquidation paving the way for a detailed probe into the $80m collapse of one of the country’s biggest home builders. Mr Park, who is also liquidator of Privum. said FTI would now proceed to a more thorough investigation into the failure of Privium.

Originally published as BA Murphy collapses owing $3m, hundreds of unfinished homes