Failed building company bosses sued for $3m
The former directors of a failed Brisbane building company are being sued for almost $3m by liquidators seeking to recoup millions owed to creditors.
Liquidator Ginette Muller claims there were reasonable grounds for former Rimfire Construction Qld directors Danny Cain and Cameron Kirkwood to suspect the company was insolvent after racking up debts to unsecured creditors of $9.2 million.
That included $3.46 million owed to subbies and a debt of $1.18 million to the Australian Taxation Office.
Rimfire collapsed in 2017 after an ill-fated joint venture with China Railway Construction Group (CRCG), the world's third-largest construction company, to develop residential and commercial developments.
The venture, CRCG-Rimfire, also was put into administration in 2017, owing subcontractors and other creditors up to $40 million and Queensland developer Devcorp about $17 million.
Rimfire had sought financial support from its Chinese partners, which it claimed had not been forthcoming. According to a claim lodged by Ms Muller in the Supreme Court, Rimfire suffered losses totalling about $11 million in the two years prior to its collapse.
Between January and September 2017, 53 creditors sent demands for payment or cancelled services in relation to debts owed by Rimfire.
"There were reasonable grounds for the defendants (directors) to suspect that the company was insolvent," Ms Muller said in the claim. Ms Muller is also claiming almost $3 million from Rimfire Constructions, the major shareholder in Rimfire Constructions Qld.
Mr Cain told the Courier-Mail that he would defend the court action and denied the company had traded while insolvent. Mr Kirkwood said he was seeking legal advice.
Mr Cain said the company had funding agreements with its Chinese partners that never eventuated. Devcorp last year lost a Federal Court battle to recoup millions of dollars from CRCG stemming from the failed venture.
Murray Thornton, the managing director of Brisbane-based Devcorp, sued CRSG after its Australian joint venture collapsed.
The court held that any further move against CRCG to recover funds would involve a potentially lengthy and complex legal judgment in China.
No criminal charges have been laid against the former directors.
Originally published as Failed building company bosses sued for $3m