Porter Davis collapse sees painter owed $40,000, while $13m government bailout announced

A family involved with a collapsed builder have been left fuming as they are have been left with nothing except a $40,000 gaping hole in their finances.

A tradie who is $40,000 in the hole after the collapse of a major building company has been left fuming as customers have received government handouts while he has been left with nothing.

In March, Australia’s 13th largest home builder Porter Davis Homes went into liquidation, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland.

The firm’s 470 staff members were left without jobs while more than 1000 unsecured creditors are cumulatively owed $71 million.

Catherine Haddo’s husband is one of those unsecured creditors, after doing contracting painting jobs for Porter Davis for 18 years.

Unfortunately, the “bulk” of his projects came from Porter Davis.

That means not only is he $40,000 out of pocket after the company’s demise, but all his work has also dried up in the month since.

“He put all his eggs in one basket and got screwed,” Ms Haddo, 48, told news.com.au.

Last month, news.com.au revealed that none of the unsecured creditors – who are mostly tradies like Ms Haddo’s husband – are expected to receive a cent from the Porter Davis liquidation process.

Meanwhile, customers have been fully reimbursed from two state government bailout packages, with a new compensation scheme rolled out on Sunday infuriating tradies but providing welcome relief to impacted homeowners.

Catherine Haddo’s family are $40,000 out of pocket because her husband is yet to be paid for his work.

Liquidators discovered that 560 customers had paid tens of thousands in deposit money but Porter Davis had never taken out building insurance, leaving them with no automatic payout from the insurer after the company went under.

Yet in an unprecedented step, Victorian Premier Daniel Andrews agreed to refund them their lost money in a $15 million government bailout announced a month later, in April.

Then, on the weekend, the Andrews government announced another round of help totalling $13 million.

Around 400 customers had missed out on the bailout as they had paid tenders, not deposits, which was three per cent of the total price of the build, but wasn’t part of the original scheme.

Max* paid $23,000 as a tender for his five-bedroom, four-bathroom house slated to cost around the $700,000 mark. This is now being covered by the state government in a separate reimbursement package.

The 46-year-old dad told news.com.au the announcement had “lifted a huge weight of stress and uncertainty off my shoulders”.

But for tradesmen thousands of dollars out of pocket, the recent announcement is just another slap in the face.

“It has been very unfortunate that no support has been given to the tradies,” Ms Haddo said in regards to her tradie husband.

“Everyone has bills to pay and families to feed. Why hasn’t there been any handouts to the tradies?”

The mum-of-two revealed she has been borrowing money from family to pay for groceries and her mortgage after incurring a $40,000 from their dealings with the construction firm.

She said it was ironic as the $40,000 they are owed was going towards a tax debt. Meanwhile, taxpayers’ dollars have been used to ensure Porter Davis customers have no losses, yet she has been left out in the cold.

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Ms Haddo’s husband worked as a contracted painter for Porter Davis for 18 years.

Porter Davis collapsed into liquidation in March amid an industry crisis.

According to Ms Haddo, there were several early warning signs that Porter Davis was struggling to pay back its debts.

“They used to pay weekly, then it went fortnightly last year, they said they were aligning the pay run with the office people,” she recalled.

By the time the company finally went bust in March, they had not paid her husband for three months. Their last invoice had been paid in February, for work up until December.

He had been run off his feet with work, often called in to do touch-ups on houses at the handover stage.

In fact, the night before the builder went into liquidation, he had been called into a job.

A liquidator’s report filed with ASIC found that Porter Davis had been insolvent since at least February 2023. There were “indicators of insolvency” prior to that.

Porter Davis has more than 1000 unsecured creditors. Picture: Richard Walker

Customers of collapsed builder Porter Davis protested and received a government bailout as a result. Picture: Richard Walker

Insolvency firm Grant Thornton are the appointed liquidators of the company and have warned that unsecured creditors will likely not get any of their money back.

In total, the failed building firm owes $146.5 million to creditors, a report found.

Of that, $57.5 million was owed to two secured creditors, the Commonwealth Bank and another company called Chesapeake, owed $32.9 million and $24.6 million respectively.

Porter Davis also owes about $18 million to its employees in unpaid wages, leave and superannuation.

Only the CBA is expected to get its money back “in full”.

Chesapeake and employees will receive a “partial dividend” as they are priority creditors.

Everyone else, estimated to be more 1000 unsecured creditors, has been warned that their status is “dividend unlikely”.

Porter Davis has more than 20 assets that “may be recoverable”. They have conducted 13 sales of furniture which has netted them $142,000.