String of building companies collapse into liquidation after ‘structural integrity’ concerns from regulator

A string of construction companies linked together have collapsed, leaving more than two dozen projects in jeopardy.

A string of construction companies linked together have collapsed, months after the building regulator forced one of the businesses to stop work over safety concerns.

On Tuesday, four building and development companies from NSW went into liquidation – Adroit Constructions Pty Ltd, Maximus Builders Pty Ltd, Maxim Builders Pty Ltd and Maxus Builders Pty Ltd.

The companies appear connected, with all of them registered to an address in Sydney’s Ryde, which is the same address of the sole director across all four businesses.

Bruce Gleeson of Jones Partners, a high profile insolvency expert who is currently overseeing the case of infamous Sydney fraudster Melissa Caddick, has taken over as the liquidator of these four businesses.

Mr Gleeson told news.com.au that 25 projects have been left in jeopardy from the group of building companies going under.

Adroit Constructions Pty Ltd, Maximus Builders Pty Ltd, Maxim Builders Pty Ltd and Maxus Builders have all plunged into liquidation. File photo. Picture: iStock

“Across the four companies, there were approximately 25 contracts at various stages of completion,” Mr Gleeson said.

“We are currently in the process of communicating with the clients on this score and the impact of the companies being placed into voluntary liquidation.”

Mr Gleeson does not yet know the company’s assets and liabilities.

He added: “None of the companies were trading at the time of my appointment. Nor will I be trading during my appointment.”

Indeed, one of the businesses appeared to have been in trouble for quite some time.

Earlier this year, in January, Maximus Builders Pty Ltd was hit with a “stop work” order from the Building Commission NSW.

Inspectors visited a residential building site in Newcastle and were concerned with what they saw.

“Non-compliant” building work was impacting “the structural integrity of the building”, including incorrect structural timber framing, non-compliant perimeter termite barriers, drainage works that “had not been installed” under the agreed plans and metal roofing not installed as intended.

“Based on those observations, I am of the opinion the building work is, or is likely to be, carried out in a manner that could result in significant harm or loss to the public or to occupiers or potential occupiers of the building to which the work relates or significant damage to property,” the order, signed by Matt Press, the Director Building Compliance of the Building Commission NSW, read.

“The developer is required to ensure all work at the Development stops in accordance with this Order by 5pm on 1/03/2024. Please read the Stop Work Order carefully and comply with the conditions,” the order continued.

“Failure to comply with this Order is an offence and may result in criminal proceedings.”

The orders were published online in March.

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Bruce Gleeson, of Jones Partners, is a high profile insolvency expert. Picture: Picture: Julian Andrews

Other builders go bust

A number of building companies have succumbed in recent years. 

Close to 3000 construction firms turned into corporate corpses in the past 12 months, according to analysis by the corporate regulator.

Mass collapses of construction companies are usually the first signs of a struggling economy, as these builders run on tight margins and rely on supply chain prices staying the same.

So even a slight change makes many of them go from being profitable to loss making. And at the moment, prices throughout the supply chain are going ballistic.

Probuild sensationally collapsed in 2022 with debts of $250 million, and then afterwards came PBS Building, owing $169 million.

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