A Queensland construction company is the latest victim of the construction industry slump after collapsing for $1.7million from 130 creditors.
The Brisbane-based company called Besse Construction has gone into liquidation with 30 employees affected, according to a director’s report filed with the Australian Security and Investment Commission.
It showed there were a total of 64 unsecured creditors out of the 130, including a number of suppliers, traders and labor hire companies affected by his disappearance.
Among the amounts owed are Bunnings, which has almost $10,000 outstanding, while the highest figure owed is $373,000 to a scaffolding company.
A number of companies owe six-figure sums, according to the report, including an engineering company with $320,000 outstanding, a construction labor company whose Besse Construction had run up a debt of $150,000 $, while another company lost $136,000 out of pocket.
Bill Karageozis of insolvency firm McLeod & Partners has been appointed to handle the liquidation after it collapsed on August 9.
He said he is currently investigating the number and amount of creditors affected by the company’s collapse, including former employees, as well as the reasons for the company’s failure.
Do you have a similar story? Continue the conversation | [email protected]
Scott Mason, general manager of commercial and real estate services at Equifax, previously said there was a hidden crisis following the woes in the construction industry.
“Rising costs, disrupted supply chains and periodic lockdowns have created a profitless boom, with many construction companies embarking on projects that are no longer financially viable thanks to steep increases in the price of building materials” , did he declare.
Insolvency has far-reaching repercussions, he added.
“The ripple effects across the whole ecosystem of providers and the people behind those companies often go unnoticed,” he said.
Overall, the construction industry has been plagued by a series of meltdowns caused by a perfect storm of supply chain disruptions, skilled labor shortages, spiraling costs materials and logistics and extreme weather events.
Earlier this year, two major Australian construction companies, Gold Coast-based Condev and industry giant Probuild, went into liquidation.
Snowdon Developments was put into liquidation by the Supreme Court with 52 employees, 550 homes and more than 250 creditors owed just under $18 million, despite being partially bought out less than 24 hours after its bankruptcy.
Others have also joined the list, including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes and Statement Builders.
Then there was NSW building society Willoughby Homes, which went into voluntary administration last week, leaving at least 30 homes in limbo.
But Victorian building companies have been particularly hard hit by the crisis.
Two construction companies in Victoria have fallen victim to the crisis after going into liquidation at the end of June, with a landlord shelling out $300,000 for a now half-built house.
Then there were smaller operators like Hotondo Homes Horsham, which was also based in Victoria and franchised to a national building company – which collapsed earlier this month affecting 11 homeowners with 1.2 million dollars of unpaid debts.
It is the second Hotondo Homes franchisee to file for bankruptcy this year, after its Hobart branch collapsed in January owing $1.3 million to creditors, according to a report by liquidator Revive Financial.
Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt. He owes about 140 employees $3.2 million that he is unlikely to be able to repay, according to the liquidator’s report.
Just last week, a Melbourne-based company, Blint Builders, collapsed with around $1 million in outstanding debt to 50 creditors, according to liquidators.