GCB Constructions subcontractors could be forced to pay back $72m as boss makes new bid for control
Subcontractors already millions out of pocket in the collapse of GCB Constructions may be forced to pay back $72m they were paid before administrators were called in. The news came as GCB’s boss made a last-ditch attempt to keep the company.
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Subcontractors already millions out of pocket from the collapse of GCB Constructions may be forced to pay back $72m they were paid before administrators were called in.
GCB owed more than $47m to suppliers, subcontractors, lenders, staff and the tax office when it went into voluntary administration on July 24, the administrators have revealed in a report filed with the corporate regulator.
A new report from David Stimpson of SV Partners said unsecured creditors could be forced to repay any funds received from GCB when they knew, or should have suspected, it was insolvent.
Almost $72m in payments made by GCB to subcontractors and suppliers as far back as November 2022 could be “clawed back” and shared between all creditors, the report said.
Administrators found the Gold Coast company stopped paying tax more than a year ago and defaulted on a $10m loan in the months before its licence was suspended.
Mr Stimpson said GCB stopped paying staff superannuation in February and had likely been insolvent from January 1 this year.
Meanwhile, GCB managing director Trent Clark has launched a last-ditch bid to keep control of the family company and save it from liquidation – but the administrator says the bid is “not in the best interests of creditors”.
Mr Clark has proposed a deed of company arrangement (DOCA), which would mean control of the company was returned to him, in exchange for an injection of funding from related companies and other unspecified sources.
The deed would involve Mr Clark’s company TCGC selling a $4.5m property and related companies Greg Clark Building and GCB Hire selling $2.5m in assets to repay secured debts including $1.2m in employee entitlement.
According to the proposal, contained in the administrator’s report, more funds would be obtained from insurance refunds on GCB contracts for its Drift and Amaya developments on the Gold Coast; proceeds from the sale of motor vehicles, equipment and unused windows and doors from the Ascot Aurora project in Brisbane; and funds from the company’s debtors.
The deed also proposes to use funds from numerous legal actions against developers that are yet to be finalised.
Mr Clark’s proposal said a litigation funder would provide $1.19m to pursue GCB’s case against Poly Group over its Ascot Aurora project.
Under the proposal, GCB would “not recommence trading”, the report said.
The administrator’s report said the proposal was “not in the best interests of creditors”, saying the property Mr Clark proposed to sell was already security for other debts and the nature of the $2.5m assets to be sold by other Clark companies remained unspecified.
Mr Stimpson’s report said he had been unable to obtain further confirmation of the litigation funding from Mr Clark.
Creditors will vote on the future of GCB at a meeting on October 20.
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