The building company collapsed this week owing $14 million and leaving 300 homes unfinished
The founder of a collapsed building company could see his Gold Coast mansion sold out from under him as creditors move to recoup money owed by the company.
Oracle Group, founded by Czech-born businessman Tom Orel, collapsed this week. The company crumbled owing an estimated $14 million and leaving 300 homes unfinished, according to The Australian.
In the weeks before the collapse, at least three of Oracle’s suppliers launched court actions to recover unpaid debts. One of those suppliers, Dynamic Bradview Roofing, lodged a caveat over Orel’s canal-front mansion, which is held in the name of his wife, Elia.
The mansion features six bedrooms, five bathrooms and a powder room, a home theatre, office, gym, and upstairs teenage retreat, The Australian reported.
According to a claim lodged in the Supreme Court in July, Dynamic Bradview is seeking $910,694.93 from Elia Orel, who signed a personal guarantee and indemnity in January to cover the debt.
The Supreme Court issued a caveat over the home on Aug. 12, prohibiting its sale or transfer until further notice.
According to Dynamic Bradstreet’s claim, the personal guarantee was “continuing and not affected by anything that may happen to the company such as it being placed into liquidation.” The terms of the guarantee were such that Elia Orel “irrevocably and unconditionally consented to the registration of the caveat on any real property she may own as security for the payment of any debt owing” to the company.
Oracle’s collapse left about 300 customers without finished homes. The Queensland Building and Construction Commission (QBCC) said that homeowners may be able to make a claim under the Queensland Home Warranty Scheme if Oracle paid an insurance premium under the contract, The Australian reported. The scheme covers work not completed or if the homeowner paid a deposit and work had not started up to $200,000, the publication said.
Oracle customer Deon Trail told The Australian that the company’s collapse had cost his family an estimated $21,000.
“What we’ve lost in the process is that we sold our house 18 months ago before the market went stupid,” Trail told the publication. “We engaged with Oracle in April last year, signed contracts in November, and then they increased prices a couple of times so we went our separate ways in mid-July and terminated contracts. We’ve been waiting to get our deposit back, and they’ve been stalling, stalling, stalling – and with them going bust, we will probably lose that and the QBCC insurance.”
Trail said that his family would likely “steer clear” of builders in the future after this experience.
“So, we will probably end up buying an established property and renovate it a bit,” he told The Australian.
