"I'm not forecasting any returns except to employees," liquidator says
A collapsed Melbourne builder will be wound up owing as much as $12 million to creditors.
Hallbuild, which trades as Hallbury Homes, went into voluntary administration Jan. 5, becoming the first major Australian construction company to collapse in 2023, The Australian reported.
The company collapsed leaving 42 projects unfinished and owing money to more than 400 creditors.
Menzies Advisory principal Michael Caspaney, who was initially appointed administrator, was named liquidator last week, The Australian reported. Caspaney said that Hallbury Homes will probably owe between $8 million and $12 million by the end of the liquidation.
“At this stage I’m not forecasting any returns except to employees,” Caspaney told The Australian. “This is usually the case where the builder has run the company dry. In my report I identified that the company was probably insolvent for most of 2022 and my estimate is a conservative $6 million while they were trading.”
Following Hallbury’s collapse, customers came forward with horror stories of shoddy work and years-long delays.
Read next: Anger rises after builder collapse
The company is just one of many Australian builders to have collapsed in the last 18 months or so as rising costs and labour shortages bit into profit margins. Russ Stephens, co-founder of the Association of Professional Builders, said the only way to get the industry back on its feet was to insist on full visibility of all company financials.
“Already this year we have seen Gold Coast company LDC on its knees, and this past month alone two construction companies in Western Australia have gone under, and the latest to collapse is EQ Constructions in NSW,” Stephens told The Australian. “While the collapses are being blamed on labour shortages and increasing construction costs, the truth of the matter is that the mismanagement of funds and lack of financial education are significant contributors.”
Caspaney told the publication that he expected the Hallbury liquidation to take a couple of years to finalise.
“I’m currently in the process of selling the assets of the company but I can’t give any details at this stage,” he said.
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