Richmond builder collapses amid $1.5m debt pile

An inner-city construction company has collapsed owing $1.5m to more than 50 creditors, with customers complaining they are still waiting for building faults to be rectified.

An inner-city Melbourne builder has collapsed amid a $1.5m debt pile, with customers complaining they are waiting for building faults to be rectified.

Richmond-based construction company Argyle Building Services was placed into liquidation earlier this week owing $1,474,932 to 55 creditors.

The builder was placed in administration in late August but administrators were unable to rescue the business.

Argyle collapsed owing $191,538 to its six employees, including $67,787 in superannuation and $82,672 in annual leave.

It had one major development – a Williamstown project made up of eight townhouses, a commercial shop and apartment – underway at the time of its collapse.

An inner-city Melbourne builder has collapsed amid a $1.5m debt pile. Picture: Instagram

The builder was placed in administration in late August. Picture: Instagram

Minutes from a creditors meeting show a number of customers have been impacted by the builder’s downfall.

One said he had been unable to live in an apartment built by Argyle for the past 12 months and had gone to the Victorian Civil and Administrative Tribunal in a bid to have faults rectified.

He said there was no insurance available for his property, the minutes show.

Another creditor, who lives in the same apartment complex, asked if there was any potential to pursue litigation for negligent building practices conducted by Argyle.

A large concrete supplier also asked whether he could collect materials left out on site at the Williamstown project.

Argyle’s director Sam Salloum told the Herald Sun his business collapsed due to “numerous unpaid invoices from developers who simply refused to pay”.

Mr Salloum said he was owed more than $2m from multiple developers that went into liquidation.

He said his company also had to stop work on a Toorak house mid-construction, as well as another job on Domain Rd in South Yarra due to unpaid debts from developers.

“In a nutshell, whatever could’ve gone wrong, did go wrong,” he said.

Minutes from a creditors meeting show a number of customers have been impacted by the builder’s downfall. Picture: Instagram

Daniel Juratowitch of Cor Cordis was appointed administrator on August 23.

He was later appointed liquidator after creditors voted to put the company into liquidation on Monday.

In a report to creditors, Mr Juratowitch confirmed the company was owed various amounts from debtors and retentions – a percentage of a contractor’s fee that’s held until they finish a project.

But he noted that several of the debtors and retentions are subject to dispute in relation to defect works.

“In the lead up to appointment, the company was subject to a number of court proceedings, particularly with respect to pursuit of debtor amounts,” he wrote.

Mr Juratowitch confirmed the company was owed various amounts from debtors and retentions. Picture: Instagram

The report also revealed Mr Salloum may have traded whilst insolvent – taking on new debts when he knew he couldn’t pay them back.

“My preliminary view is that the company may have been insolvent prior to the appointment of the administrator,” he wrote.

“In this regard, should the company be placed into liquidation, the director may be exposed to an insolvent trading claim.”

Mr Juratowitch said he is currently assessing whether there are any recoverable amounts, realising the company’s assets and pursuing available claims where applicable.

“A further report detailing the findings of these investigations will be issued within the next three months,” he said.

The business, established in 2011, was a mid tier construction company, specialising in medium density residential developments.

The construction capacity of the business ranged from $1m to $20m.