A Queensland building company is the latest casualty of the construction industry crisis after collapsing owing $1.7 million to 130 creditors.
The Brisbane-based business called Besse Construction went into liquidation with 30 employees impacted, according to a director’s report lodged with the Australian Security and Investment Commission.
It showed there are a total of 64 unsecured creditors out of the 130, including a number of suppliers, tradies and labour hire companies hit by its demise.
Among those owed money include Bunnings which has close to $10,000 outstanding, while the highest figure owed is $373,000 to a scaffolding company.
A number of companies are owed six-figure sums, according to the report, including an engineering company with $320,000 outstanding, a construction labour company which Besse Construction had racked up $150,000 in debt, while another firm was left $136,000 out of pocket.
Bill Karageozis from insolvency firm McLeod & Partners has been appointed to deal with the liquidation after it collapsed on August 9.
He said he was 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.
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Scott Mason, general manager of commercial and property services at Equifax, previously said there is a hidden crisis as a result of the construction industry woes.
“Rising costs, disrupted supply chains and periodic lockdowns have created a profitless boom, with many construction companies committed to projects that are no longer financially viable thanks to major price increases for building materials,” he said.
There are far-reaching impacts of insolvency, he added.
“The flow-on effects to the whole ecosystem of suppliers and the people behind these businesses often go unseen,” he said.
Construction crisis
Overall, the construction industry has been plagued with a spate of collapses caused by a perfect storm of supply chain disruptions, skilled labour shortages, skyrocketing costs of 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 ordered into liquidation by the Supreme Court with 52 staff members, 550 homes and more than 250 creditors owed just under $18 million, although it was partially bought out less than 24 hours after going bust.
Others joined the list too including Inside Out Construction, Solido Builders, Waterford Homes, Affordable Modular Homes and Statement Builders.
Then there was NSW building company Willoughby Homes, which went into voluntary administration last week, leaving at least 30 homes in limbo.
But Victorian construction companies have been particularly hard hit by the crisis.
Two building companies from Victoria were casualties of the crisis having gone into liquidation at the end of June, with one homeowner having forked out $300,000 for a now half-built house.
Then there have been smaller operators like Hotondo Homes Horsham, which was also based in Victoria and a franchisee of a national construction firm – which collapsed earlier this month affecting 11 homeowners with $1.2 million in outstanding debt.
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It is the second Hotondo Homes franchisee to go under this year, with its Hobart branch collapsing in January owing $1.3 million to creditors, according to a report from liquidator Revive Financial.
Norris Construction Group, which was in Geelong, collapsed in March with $27 million in debt. It owes $3.2 million to around 140 staff that it is unlikely to be able to repay, according to the liquidator’s report.
Just last week a Melbourne-based company Blint Builders collapsed with approximately $1 million in outstanding debt owed to 50 creditors, according to the liquidators.
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