Tradies last to be paid as G.J Gardner collapse passes $1m
MORE than 50 subcontractors are owed about $1.5million after the collapse of G.J. Gardner at North Ipswich in January.
The loss, more than the $750,000 first predicted, has been revealed after the first meeting between creditors and Worrells Solvency & Forensic Accountants.
Worrells' partner Adam Ward revealed the $1.5million owed to contractors was in addition to $20,000 in employee expenses and up to $400,000 owed to secured creditors.
Mr Ward said employee entitlements would be paid first followed by secured creditors.
"It's a waiting game and creditors know how these things generally go," he said.
Mr Ward said it was too early to estimate how much cash, if any, would be recouped by out-of-pocket tradies.
He acknowledged lots of money would be required to cover debts.
"There would have to be substantial (cash) recovery for the dividend to be paid to subcontractors," he said.
Mr Ward said G.J. Gardner's assets were, on paper at least, cash owed to the company for home builds.
Many homes have been left unfinished after the company went bust and insolvency clauses in contracts likely means the cash will not be paid to G.J.
"The assets are really debtors owing to the company," Mr Ward said.
"Even though there are homeowners at various stages of building, we don't know what's going to be collected.
"It's going to take many months to determine that."
Mr Ward expected all would have their homes finished.
"We do have an insurance scheme through the Queensland Building and Construction Commission and my understanding is they shouldn't be out of pocket," he said.
"The big losers will be the subcontractors and the unsecured priority creditors."
Peggy Kendall's Mt Alford home remains an empty shell after G.J went bust.
She has lost about $200,000 through the dilemma.
"Even if we get insurance we'll still be out of pocket," she said.
"All our subbies who were on our job, they've been fantastic; they've emailed me a quote to finish our house at cost."
"It's still tough."
Mr Ward said this situation happened " too frequently in the building industry".
"It's always an industry that goes through turmoil," he said.
Mr Ward believes up to 30 per cent of business insolvencies are from the construction industry, the most represented sector.
"It seems to be an industry where a small group are happy to try and push someone to the edge, to the brink," he said.
Several subcontractors met with Mr Ward on Friday to check the status of the insolvency investigation.
"Some of the subcontractors are quite familiar with the process," Mr Ward said.
Mr Ward will sift through financial records to identify transactions that might be recoverable.
He will also investigate and identify any potential law-breaking conduct by the company director, Pieter Burghout.
"I'm a bit like the corporate policeman," he said.