Boss of collapsed building company which owes $5.7m uncontactable

The boss of a collapsed building company appears to have vanished despite vowing to sell his properties to pay people back.

The boss of a collapsed building company appears to have vanished despite vowing to sell his properties to pay back more than 50 creditors.

Sydney-based residential builder Willoughby Homes went into administration in 2022 owing $5.7 million after a news.com.au investigation revealed building sites had stalled for months, the company’s insurance had not been reinstated and staff were not being paid.

More than 40 of its creditors were aspiring homeowners who had paid deposits to Willoughby Homes later learned they were not covered by insurance, totalling $709,000, causing their dream of home ownership to go up in smoke.

The director of Willoughby Homes, Steve Willoughby, owned seven properties and proposed to sell them all to generate $1.3 million in assets to distribute among creditors.

For the past three years, creditors — especially the uninsured customers — have been hoping to claw back some of their lost money from the proceeds of the property sales.

But in a report released last week, submitted to the corporate regulator, administrators have revealed they have lost contact with Mr Willoughby and they have barely recovered half the amount of what was promised.

The report revealed it’s unclear if Mr Willoughby has sold all the properties he said he would – and that most creditors won’t get back a cent.

Steve Willoughby appears to have vanished.

Steve Lee lost around $120,000 from the ordeal.

Mr Lee and his family only moved into their home last year, after a five-year ordeal.

It’s a particular gut punch for Marice Hartono, who handed over $38,000 to Willoughby Homes thinking she was building her family’s future.

Instead, she lost the money and couldn’t get it back on insurance. Her last hope was Mr Willoughby’s property sales going well.

Ms Hartono said she was “very disappointed” to read the new report to learn she won’t be getting any money back.

She said she had expected the worst as it was “taking so long” for the administrators to release the report.

Ms Hartono said she had to employ two other builders to finally get her dream home completed, taking four years to finish. She was also battling breast cancer at the same time.

“I never had much hope,” she added.

Steve Lee, 48, went through a similar experience, having lost $20,000 to Willoughby Homes.

“The unfortunate thing is because of Willoughby Homes (collapsing), the prices have gone up,” he said. “We had to pay $100,000 more.”

The dad said he first engaged builders in 2019 and it wasn’t until June last year that his family were finally able to move into their new place.

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Marice Hartono has been battling cancer while also trying to salvage her plans to build a dream home.

Ms Hartono’s family finally completed their home, after losing $38,000 to a deposit to Willoughby Homes.

Mr Willoughby was initially able to spare his company from going into liquidation through signing a deed of company arrangement (DOCA) which is where he came to an agreement with creditors to repay them by selling his properties.

But administrators said he has failed to uphold his end of the deal as he has essentially ghosted them. They have now recommended the company be put into liquidation at the next meeting, to be held later this month.

David Mansfield and Jason Tracy of Deloitte, the appointed administrators, wrote in a report to creditors that “the director has failed to respond to our repeated attempts to contact him since approximately late June 2024”.

They said they had made “many efforts” to contact him, but had not heard back, and Mr Willoughby had even missed a deadline they had set.

They also contacted the building director’s solicitor. However, the lawyer said they had no further instructions on the matter and so were unable to help.

“We have requested on several occasions from the director a statement of his personal assets and liabilities, which has not been received to date,” the administrators also wrote.

News.com.au also attempted to contact Mr Willoughby and received no response.

Mr Willoughby’s most luxurious property, a mansion in outer Sydney.

This property unfortunately sold for less than expected.

Mr Willoughby had six properties dotted around NSW, including in outer western Sydney and along the state’s north coast, as well as another property in tropical Queensland.

These seven properties were estimated to range in price from $220,000 to $2 million in value.

Unfortunately, six of the properties ended up selling for much less than they were valued at. It’s unclear if a seventh property has been sold. The administrators have requested proof of its sale but Mr Willoughby has not responded.

Mr Willoughby’s Kenthurst property, in a semirural part of northwestern Sydney, was meant to be the crown jewel of his portfolio.

News.com.au previously reported the mansion had five bedrooms and four bathrooms as well as a pool, and was bought by Mr Willoughby in 2018.

Parts of the property were under renovation at the time Willoughby Homes collapsed, and Mr Willoughby told administrators he had run out of the funds to continue the building works and wanted to sell it in its current state.

Unfortunately, it then sold for $400,000 less than expected.

Mr Willoughby’s property in Lethbridge Park in greater western Sydney sold for $100,000 less than administrators had estimated, while the unit he had in Narara on the Central Coast sold for $145,000 less.

A one-storey house in the western Sydney suburb of Hebersham sold for $120,000 less than administrators were hoping.

A property in Earlville, in Queensland’s far north, sold for the amount expected. However, administrators noted the sale of the property was finalised in April 2023, the settlement statement was only provided to them in January the following year.

The Kenthurst property was sold as is, despite renovations being uncompleted.

Other properties also sold for less than they were valued at.

Mr Willoughby owned another property in Griffith, this one just a block of land.

“The director advised that the Griffith property was subject to fire damage and there was no equity on this property,” the administrators wrote.

“We requested further details of the fire damage including photos from the director which were not received despite our efforts to contact him.”

They ended up organising a valuer to do a “kerbside appraisal” of the property that valued the place at between $60,000 to $70,000. Yet, creditors ended up gaining no money from this property, as the bank had already possessed it.

For the final property, one in Harden, about an hour’s drive from Wagga Wagga, administrators are not sure if Mr Willoughby has actually sold it.

“We made repeated attempts to contact the director for an update regarding the sale progress of the Harden property,” the administrators wrote.

“The director finally provided an update in May 2024 advising that the Harden property was to be auctioned shortly and that further details regarding the date of auction would be provided once available.”

However, they never received any further updates. They noted they made “consistent efforts” to find out more.

Administrators also noted that a recent online search of this property shows it’s not currently listed for sale.

In all, the disappointing sales gained back $621,428 for creditors.

This was $778,000 less than Mr Willoughby promised in his DOCA.

Overall, only employees are expected to regain any money, estimated to be between 11 and 44 cents for every dollar they are owed. Other creditors will receive nothing.

The costs gained from the sale of properties went into paying the administrators. Then there’s $249,688 left which is expected to remunerate the administrators in the future.

Willoughby Homes went bust in 2022. Picture: NCA Newswire / Gaye Gerard

News.com.au has been extensively reporting on Willoughby Homes. Picture: NCA Newswire / Gaye Gerard

In an earlier statement to news.com.au, Mr Willoughby said: “Whilst I do not have an obligation to do so, I am proposing to creditors to sell properties that I have owned for 10 plus years.

“The economic climate has not been good for anyone.”

Gyprocking company Regno Trades began winding up proceedings against Willoughby Homes in early July 2022 over an unpaid debt of $184,000 and three supporting creditors also joined the case – H & R Interiors, owed $73,925, an ex-employee owed $53,000 in unpaid wages and Finese Electrical and Air Conditioning, owed $4531.

Administrators also found that Willoughby Homes had been trading insolvent for 18 months.

Mr Willoughby blamed the failure to obtain insurance as one of the main reasons for his company’s collapse, as well as Covid-prompted lockdowns, tough market conditions and increasing costs of materials and labour.

Cherry Cobrador-Wong, then 33, from Sydney’s west, told news.com.au at the time of the company’s demise, in 2022, that she and her husband had fallen behind on mortgage and rent because their house has been left untouched for months.

Willoughby Homes “have put us under a bus and run over us,” Ms Cobrador-Wong told news.com.au.

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Originally published as Boss of collapsed building company which owes $5.7m uncontactable