Administrator David Stimpson adjourns creditor meeting after recommending creditors liquidate GCB Constructions
Failed builder GCB Constructions has staved off liquidation – for now. Here's what it means for the $47m in debts
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Failed builder GCB Constructions has staved off liquidation – for now.
A creditor meeting to decide its fate has been adjourned to allow the liquidator to obtain legal advice on certain progress claims made by creditors.
At the rescheduled meeting, on a date to be set, liquidator David Stimpson of SV Partners will recommend liquidation as the only way forward for the company, which has debts of $47m to suppliers, subcontractors, lenders, staff and the tax office.
Mr Stimpson said liquidation was “the only viable option” after a touted arrangement to salvage the company failed to materialise.
GCB went into voluntary administration on July 24, leaving construction of more than 500 apartments in limbo, a day after the QBCC cancelled its licence over a failure to pay debts.
At the first meeting of creditors for the collapsed group, administrators said initial estimates showed it owed more than $5.2m in tax and more than $1.7m in superannuation and other staff entitlements.
Creditors listed: Liquidation tipped for GCB Constructions
August 23, 2023: Flailing Gold Coast building company GCB Constructions owes more than $47m to suppliers, subcontractors, lenders, staff and the tax office, an initial report from administrators has revealed.
Administrator David Stimpson of SV Partners has recommended GCB be tipped into liquidation as “the only viable option” after a touted arrangement to salvage the company failed to materialise.
GCB went into voluntary administration on July 24, leaving construction of more than 500 apartments in limbo, a day after the QBCC cancelled its licence over a failure to pay debts.
At the first meeting of creditors for the collapsed group, administrators said initial estimates showed it owed more than $5.2m in tax and more than $1.7m in superannuation and other staff entitlements.
SCROLL DOWN FOR CREDITOR CLAIM LIST
The names and amounts owed to unsecured creditors, including subcontractors, suppliers and lenders from Brisbane to northern NSW take up 32 pages of the meeting minutes.
Page after page, outstanding claims range in value from a few hundreds dollars to a few million, with small and medium trade businesses among the hardest hit.
Some family-owned local businesses are owed six-figure sums.
GCB’s secured creditors – NAB, AssetInsure and Pyramid Capital – will be paid first if there are any funds realised through a liquidation.
Among the claims made against GCB are more than $4.8m claimed by companies related to GCB and/or directed by its sole director Trent Clark.
Administrator David Stimpson of SV Partners said the amounts listed as owed by and owing to GCB in the minutes of the first meeting had not been finalised.
While administrators initially flagged Mr Clark hoped to propose a deed of company arrangement to avoid liquidation, Mr Stimpson said no arrangement had eventuated.
In a 97-page report sent to creditors on Tuesday night, Mr Stimpson said GCB had 22 accounts with NAB - mostly “project specific” accounts.
“Any funds held in the Company’s accounts are likely to be retained by NAB given the debt owed to it,” the report said.
The report said $31.7m was owed to GCB by trade debtors, including Ascot 048, which is listed as owing $11.3m, an amount currently under dispute in court.
Vale (Aus) No 1, linked toDrift developer GDI Group, is listed as owing $5.1m, which is also being tested in the court.
Marine Quarter Southport, developer of the project of the same name, is listed as owing GCB $6.9m; Royal Pines Projects is listed as owing $2.13m; Si Bilinga $1.36m; and Uniting Care is listed as owing $1.64m.
According to the report, GCB owned 18 vehicles, including a 2021 Mercedes Benz GLE53 Wagon, secured by NAB, and nine Nissan Navaras.
The report said GCB’s 13 projects, which had been taken back by their developers, had $4.9m in outstanding progress claims; $9.21m outstanding subcontractor claims; $1.42m cash retentions and $8.01m in bank guarantees issued by the company to the developers.
The administrators found GCB had traded at a loss during FY23, but had previously been profitable.
The report said adminstrators believed Mr Clark may have breached the Corporations Act “If it is proved that he continued to trade the business and incurred further debts at a time when he had knowledge or ought to have had knowledge of the Company’s insolvency”.
Further, they said, he “failed to make payment of statutory debts (being PAYG and superannuation), and comply with his statutory lodgement obligations”.
“We have reported these offences to ASIC,” the report said.
Mr Stimpson said developers involved with the company, and Mr Clark had co-operated with the administration to date.
“There’s still a fair bit of work to do,” he said.
The company is facing multiple debt claims in the Brisbane Supreme Court, including a wind-up action, which has been adjourned until September 30.
The collapse came as GCB was fighting developers of two key projects in the courts, claiming it was owed more than $14m for work on the projects.
Creditors will vote on a recommendation to liquidate the company at the next meeting, on August 30.
Join the conversation
First look: Giant ‘sky-mansion’ tower on quiet residential street
Plans for a giant riverfront tower, which will boast the Gold Coast’s largest penthouse, have been unveiled for a residential street which have been high-rise free until now.
Read more
The long, hard slog of changing workplace culture at Rio
Overhauling a culture of sexual harassment and bullying is not a linear exercise and the Rio Tinto boss is finding out the tough way, as its two-year progress report is released to staff.
Read more