Felmeri Group creditors and mystery backer revealed as debts balloon to close to $20m
The debts of failed builder Felmeri Group are expected to reach close to $20m as the identity of major creditors, and a mystery Malaysian backer, are revealed.
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The developer behind the stalled $220m Wallaroo Shores housing development, and holiday park operator Discovery Parks, have been listed among the largest creditors of failed building company Felmeri Group, as administrators investigate promises made by a mystery Malaysian investor to inject millions into the company less than a year before it went under.
Administrator Leigh Prior of Agile Business Advisory has also warned the company’s debts could ballon out from an estimated $10m to up to $20m as the fallout for customers left with unfinished homes is fully worked through with insurer QBE.
Minutes from the first meeting of creditors have been lodged with the corporate regulator by Mr Prior, detailing the trail of debts left by Felmeri after its collapse last month.
According to a list of creditors included in the report, Wallaroo Shores developer Monopoly Property Group has been left chasing more than $1.1m, while Discovery Parks is owed closed to $875,000.
Julia Felmeri, the daughter and sister of the company’s directors, both named Frank, is listed as the largest creditor, with a claim of $1.6m.
The company was the main building contractor at the Wallaroo Shores development, and had been engaged by Discovery Parks to build cabins at its holiday and caravan parks in Whyalla and King Canyon in Northern Territory.
While the company’s debts currently stand at close to $10m, Mr Prior said that number would increase as his investigations continued.
“What isn’t there is any claims that either go through QBE under the builder’s indemnity insurance, or any project shortfalls that aren’t covered - that is likely to be some millions,” he said.
“So you could be looking at $15 to $20m of creditor claims by the time all those losses are quantified.”
Mr Prior said up to 20 of the 120 customers affected by Felmeri’s collapse did not have the required building indemnity insurance, which builders must arrange prior to starting work on projects costing more than $12,000.
Meanwhile, as part of his investigations into the company’s assets at the time of its collapse, Mr Prior revealed to creditors that Malaysian-backed My Assets (Australia) Pty Ltd had last year promised to pay more than $5.1m for a 20 per cent stake in Felmeri, but had so far only contributed $1.8m, leaving a further $3.3m owing to the company.
He said further investigations into the deal would take place before determining whether those funds would be recouped for the benefit of creditors.
“The commerciality of pursuing these funds will certainly form part of the ongoing investigations, as will inquiries as to why the funds were advanced and what representations were provided by the company, noting that payment of $5m for a 20 per cent shareholding indicates that a value of $25m was placed on the company less than 12 months before the company was placed into administration,” the minutes say.
Australian Securities & Investments Commission documents reveal My Assets (Australia) is owned by Melbourne-based couple Sy Choon Yen and Yen Loo Looh, relatives of Malaysian timber tycoon Admond Looh.
Property records show the company owns several allotments in the Wallaroo Shores resort project.
The project was due to open in September but now faces another lengthy delay after being left unfinished by Felmeri, which was the main building contractor.
Felmeri, which traded as Felmeri Homes and Felmbuilt Commercial, fell into administration on May 19, following a string of complaints around claims of poor workmanship and lengthy delays that prompted an investigation by CBS.
Claims from commercial customers, which include the Wallaroo Shores and Discovery Parks projects, currently sit at $2.8m, while close to 130 suppliers and contractors are owed $2.5m.
The minutes of the meeting also explain how close to 20 employees had not been paid super since last July.
The administrators will send a detailed report to creditors by June 19, ahead of a second meeting to be held by June 26.
Mr Prior said the company’s directors were still considering the feasibility of a deed of company arrangement proposal - a repayment plan that would require the approval of creditors to hand back control of the company to the directors.
Discovery Parks, Monopoly Property Group and Mr Felmeri have been contacted for comment.
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