Felmeri collapse leaves 150 unsecured creditors chasing $2m in unpaid debts
Creditors of Felmeri Group have been left chasing millions in unpaid debts, adding to the woes of dozens of customers following the home builder’s collapse.
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Suppliers and trade creditors of embattled building company Felmeri Group have been left chasing close to $2m in unpaid debts, adding to the woes of dozens of customers who remain in limbo following the collapse of the home builder on Friday.
Administrator Leigh Prior from Agile Business Advisory confirmed close to 150 unsecured creditors were owed a total of about $2m, while secured creditor ANZ is owed nearly $500,000 and related companies have claims in for more than $2m.
Estimates of the number of affected customers have also blown out.
Mr Prior said Felmeri had recently signed contracts, but not started work, on at least 20 homes, adding to the 43 projects where construction had commenced.
And those figures don’t include the company’s biggest project, the $42m 100-townhouse Wallaroo Shores Resort development, where it was in various stages of construction on dozens more incomplete homes.
Mr Prior met with Consumer and Business Services (CBS) on Monday morning to discuss their investigations, before meeting with Felmeri’s 20 or so employees in the afternoon.
He said the administrators were investigating the possibility of Felmeri continuing to trade, but that would depend largely on the actions of CBS, which had already imposed restrictions on Felmeri’s building licence, prohibiting it from entering into any new building contracts and requiring regular updates on current builds.
“We did have a constructive meeting with the commissioner (CBS commissioner Dini Soulio) and there was information sharing on both sides to find an optimal path forward,” he said.
“There is a possible path forward that would allow the continuation of trading, with a focus on meeting the obligations to the current customers.
“But obviously there’s still a lot of investigation to do, and dealing with issues like insurance and funding, to be able to get through to that second creditors meeting.”
Felmeri, which traded as Felmeri Homes and Felmbuilt Commercial, fell into administration on Friday following a string of complaints around claims of poor workmanship and lengthy delays that prompted an investigation by CBS.
The company was established by father-son duo, both named Frank Felmeri, in 2006.
The Advertiser visited Felmeri’s Wayville office on Monday, but was told Mr Felmeri (junior) was in the office but would not be commenting.
However, at his Hallett Cove home later in the day, Mr Felmeri (senior) said all of the unfinished homes would be completed, but some at a higher cost than initially quoted.
“As soon as we get insurance they will be built,” he told The Advertiser.
“They will be built. Everything will be coming good.
“What we priced five years ago we can’t do.”
When asked about customer complaints, he said: “Not everything is true.”
ASIC records show an earlier attempt to wind up the company was made by scaffold hire company Waco Kwikform in February, but that was later dismissed.
Felmeri’s downfall leaves the Wallaroo Shores Resort project facing another lengthy delay to its expected opening in September.
Its developer, Ben Howard from Monopoly Property Group, did not return calls.
Felmeri’s fate could be decided at a second creditors meeting, where creditors typically vote on whether to liquidate a company, or alternatively support a proposal by directors for some form of repayment plan.
Administrators are required to hold a second creditors meeting within five weeks of their appointment.
If Felmeri is stripped of its building licence or prevented from trading, or if creditors vote to liquidate the company at the second creditors meeting, customers will be forced to find another builder to complete their homes through their building indemnity insurance.
Mr Prior said he would also consider proposals from other home builders interested in taking over certain projects.
Originally published as Felmeri collapse leaves 150 unsecured creditors chasing $2m in unpaid debts
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