Brisbane building company collapses owing $2 million
Employees impacted by the company’s demise are owed $320,000, while customer disputes have made it hard to recover some of the money.
A luxury building company based in Brisbane is the latest causality in the construction industry as it collapsed owing almost $2 million.
The company, which specialised in luxury home renovations of inner-city homes, was called Art Struct and had been operating since 2006 before it went into administration.
Insolvency expert Jarvis Archer from Revive Financial was appointed to deal with the firm’s collapse.
He said the company had struggled after it suffered significant losses due to cost blowouts on materials while customers remained on fixed price contracts.
Art Struct had $844,000 of invoice and progress claims that were unable to be recovered, Mr Archer revealed, due to disputes from customers and issues with its building licence.
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The building firm had all of its 14 contracts terminated by customers and ceased to trade in January, he added.
“The director attempted to complete some of the works under his own building licence,” he told the Courier Mail.
The company’s debts also included $900,000 outstanding to the Australian Taxation Office, while $320,000 is owed to employees’ super funds and trade creditors are out of pocket by $613,000.
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The builder requested Art Struct’s licence be cancelled at the start of the year, according to
the Queensland Building and Construction Commission records, which also showed a huge drop in the value of work being completed by the firm.
Residential work undertaken by the company had topped $4 million in 2017 but plummeted to $1.4 million last financial year.
Dozens of collapses
The construction industry is in crisis thanks to a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of materials and logistics, and extreme weather events.
Dozen of builders in Queensland alone have gone under.
Most recent was Queensland residential builder Oracle Building which went into liquidation in August, owing a reported $14 million and impacting 300 homes, 200 suppliers and subcontractors alongside 70 staff members who were made jobless.
Earlier this year, two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, went into liquidation.
Snowdon Developments was ordered into liquidation by the Victorian Supreme Court last month with 52 staff members, 550 homes and more than 250 creditors owed $28 million.
Others joined the list too including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes and Statement Builders.
Then there was NSW building company Willoughby Homes, which went into voluntary administration earlier this month, leaving at least 30 homes in limbo.
From Victoria to Queensland
National franchises like Hotondo Homes Horsham, which was also based in Victoria, collapsed earlier this month affecting 11 homeowners with $1.2 million in outstanding debt.
It is the second Hotondo Homes franchisee to go under this year, with its Hobart branch collapsing in January owing $1.3 million to creditors, according to a report from liquidator Revive Financial.
Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt.
It owes $3.2 million to around 140 staff that it is unlikely to be able to repay, according to the liquidator’s report.
Just last week a Melbourne-based company Blint Builders collapsed with approximately $1 million in outstanding debt owed to 50 creditors, according to the liquidators.
Another Queensland builder, Besse Construction also collapsed owing $1.7 million.
sarah.sharples@news.com.au
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