More businesses under the VCON Group collapse into insolvency, 46 employees lose jobs

The demise of a high-end Melbourne construction group has worsened, with four other entities collapsing into insolvency and dozens more employees sacked.

The collapse of a high-end Melbourne construction group has dramatically expanded with dozens of additional employees sacked as four more companies go bust.

VCON, known for its award-winning projects across Melbourne including winery Jackalope on the Mornington Peninsula and apartment block Fawkner House in South Yarra, collapsed into liquidation late last year.

The Herald Sun can now reveal two more companies which operated within the VCON Group had liquidators appointed to them last week, resulting in close to 50 new job losses.

Those companies traded under the V-Struct brand.

On top of this, two companies which operate under luxury multi-residential and commercial builder Element Five have also gone bust

Element Five and Element Five (Aust) entered liquidation and voluntary administration respectively on Thursday last week.

VCON and Element Five were founded by brothers Anthony and Robert Morton.

The collapse of the VCON Group has resulted in close to 100 jobs being axed and left creditors facing losses of more than $30m.

Element Five and Element Five (Aust) have entered into liquidation and voluntary administration. Picture: Supplied

VCON is known for its award-winning projects including winery Jackalope on the Mornington Peninsula. Picture: Supplied

A Grant Thornton spokesperson told the Herald Sun the liquidators had ceased trading the two V-Struct businesses, V-Struct and V-Struct Projects No. 1.

That had resulted in 46 employees being made redundant.

“The liquidators are in the process of supporting these employees in relation to their claims and entitlements,” the spokesperson said.

Preliminary investigations into the first two VCON entities to collapse has found they ran into trouble as a result of a dispute with a developer on a substantial project in Brighton, the spokesperson said.

“The dispute resulted in performance guarantees being cashed and resulted in VCON’s cash flow being significantly impacted,” they said.

“Ultimately this prevented them from securing new projects, and consequently could not continue operations.”

The spokesperson said although its associated entity V-Struct was actively engaged in several projects at the time of VCON’s collapse, the extremely challenging environment in construction, coupled with the flow-on effect of the liquidation, affected its ability to secure new work.

“We understand the VCON Group exhausted options to secure further funding required to allow V-Struct and Element Five entities to continue to operate viably, and the directors were left with no option but to place the companies into liquidation and voluntary administration respectively,” they said.

Element Five’s projects include 10-storey residence and commercial block Ukiyo in Prahran. Picture: Supplied

Unsecured creditors are owed more than $32m from the collapse of VCON alone. Picture: Supplied

Unsecured creditors are owed more than $32m from the collapse of VCON alone, which resulted in the laying off of around 40 staff, the latest update from Mr Hewitt revealed.

It is not yet known how much is owed from the collapse of Element Five and V-Struct entities and whether, or how many projects were under construction when they collapsed.

It comes after the Herald Sun revealed VCON was being probed for allegedly shuffling millions of dollars to related companies and selling off assets – including 10 cars – in the lead up to its downfall.

Mr Hewitt previously raised concerns over more than $7m in payments allegedly made to companies associated with its directors, as well as a number of asset sales covering cars, property, plant and equipment and an active building contract.

The Herald Sun is not suggesting any wrong doing by the Mortons, only that the liquidators are investigating these allegations.

VCON, which describes itself as “one of Melbourne’s most prestigious construction companies” has been operating for over 20 years.

The company worked on the $40m development of Jackalope Hotel in Merricks North which included a 143-year-old homestead and winery with a 46-room hotel.

They were also behind an award-winning 30-residence complex Elwood House in Bayside, and apartment complex No. 6 Sydney Street, in Prahran.

Some of Element Five’s projects include 10-storey residence and commercial block Ukiyo in Prahran and residential tower Montague Square in South Melbourne.

Originally published as More businesses under the VCON Group collapse into insolvency, 46 employees lose jobs