Norris Construction Group collapse leaves $27m debt, ex-staff may not be paid

The last salvation for more than 200 former Norris employees chasing entitlements owed after the building company’s collapse can be revealed.

A collapsed Geelong construction firm and its associated companies is unlikely to repay all of its $27 million tax and bank debt, and does not have enough money to pay the majority of its former staff, its liquidator says.

Instead 235 former employees of the Norris group, owed a combined $4m in wages and entitlements, will have to rely on the federal government’s Fair Entitlements Guarantee (FEG) for a pay out.

The scheme for employees of companies which become insolvent caps back pay and does not pay superannuation owed.

Site photos

Liquidator KordaMentha said in its report to creditors that the Norris Construction Group, and seven associated companies, led by Tim Norris, collapsed in March due to a poor culture among management that caused high staff turnover; and because it repeatedly pursued revenue over sustainable growth.

ARE YOU STILL WAITING FOR A NORRIS GROUP PAY OUT? CONTACT: [e-mail]

The group’s wages, retrenchment payout and superannuation bill includes $3.23m to former employees of Norris Construction Group; $187,000 for Norris Projects Group, almost $277,000 for Geelong Commercial Waste; $245,000 for Gravel Pits Plumbing and more than $182,000 to those who worked at Norris Mechanical Services.

Liquidator KordaMentha said the Norris group collapsed owing $22 million to the Westpac bank, and $5 million to the Australian Tax Office which was unlikely to be repaid.

An auction of the company equipment and assets in May raised more than $17m which is expected to be returned to the Westpac Bank.

The Norris group includes Norris Construction Group, Norris Investments, Geelong Commercial Waste, Norris Mechanical Services, Gravel Pits Plumbing, Norris Projects Group, Enviro Group and Norris Enviro Hire.

In June Norris Construction Group owed $7.91m to creditors while Geelong Commercial Waste owed more than half a million dollars.

KordaMentha partner Andrew Knight said in a statement he understood 90 per cent of former Norris group staff had been paid entitlements via the FEG.

“At this stage, there is insufficient circulating asset recoveries to pay employees of four of the five employing entities. We have recovered sufficient assets (from Geelong Commercial Waste) to allow for a dividend to be paid – estimated in the amount of 50c to 100c in the dollar.

“We understand that for four of the five employing entities, FEG has processed and paid over 90% of the employee claims.

“FEG is still working on (Norris Construction Group) claims which are more complex due to the quantity of claims as well as the relevant award which applies to these employees.

Norris Construction Group site in Gravel Pits Road, South Geelong. Picture: Alan Barber

“We estimate the majority of these claims will be resolved and paid within the next month.

“Unfortunately, there are some entitlements that are not covered by FEG... and payment of those are dependent on the outcome of the liquidations.”

The Norris group has worked on major projects across Melbourne and southwest Victoria, and projects across Geelong including Manufutures hub at Deakin University and the Marngoneet and Chisholm Road prisons in Lara.

Speaking about the ATO debt Mr Knight said: “(It) is unsecured, and given the likely shortfall to the employees and the secured creditors, it’s unlikely unsecured creditors including the ATO will be paid a dividend.”

KordaMentha said it was investigating the Norris group for “potential offences under the Corporations Act.”

KordaMentha is due to be paid a maximum of $1m after it completes liquidation of the Norris group.

Originally published as Norris Construction Group collapse leaves $27m debt, ex-staff may not be paid