The Brisbane franchise of Gold Coast residential property group Cavalier Homes has been placed in administration, just weeks after the owner of Cavalier Homes’ Warrnambool and Gippsland franchises also collapsed.
The Gold Coast-based franchisor is not in administration.
Gippsland-based commercial builder Kirway Constructions, the owner of the Warrnambool and Gippsland franchises of Cavalier Homes, collapsed on March 8.
Gess Rambaldi, liquidator of Kirway Constructions at Pitcher Partners, says a creditors’ meeting was held on March 16 in which creditors were told there were a number of projects at various stages of construction.
A tender process has started for the completion of the several projects to preserve the value of the contracts. Expressions of interest are due tomorrow.
Rambaldi says Kirwood was not able to finish these projects because it ran out of money and had sacked its 50-odd employees.
He said it was too early to comment on the causes of insolvency or whether the company had been running losses for years.
But he said directors had formed a view that the “construction industry itself had ground to a standstill, and the tender processes had dried up.”
Meanwhile, franchise Cavalier Homes Brisbane Pty Ltd, and three related companies, have collapsed.
Lloyd Kerr, partner at Jirsch Sutherland, says the Brisbane business is no longer trading after “ongoing regulatory issues” but stresses that it’s “business as usual” for other Cavalier franchises.
Kerr said just days into his appointment, he’s not yet sure how long the Brisbane franchise has been in trouble, but creditors are owed north of $3 million.
They include suppliers, interests related with the company and possibly the Queensland building regulator.
The franchisor has expressed its desire to help the 30-odd customers with partially completed houses, Kerr said.
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A creditors’ meeting will be held next week, and a detailed report will follow.
A spokesman for the Queensland Building Services Authority told the ABC that Cavalier Homes Brisbane did not have enough funds to continue operating.
“A number of consumers have contacted us with regards to the progress of the work – that it’s very slow on site, their jobs have stopped, they haven’t got the capacity to install roofs,” the spokesman said.
“We’re concerned about consumers, subcontractors, trade contractors and suppliers – so we’ve taken the step to immediately suspend [Cavalier Homes] licence.”
According to its website, Cavalier Homes is one of Australasia’s largest residential building entities and provides specialist construction finance advice.
It moved into franchising in 2001, one decade after setting up on the Gold Coast.
“With the move into franchising in 2001, Cavalier targeted quality driven builders in key regional locations to come on board as franchisees. This meant new home clients in regional locations could deal with a local builder supported by the design range and buying power of one of Australia’s largest building companies,” the company says.
Cavalier Homes was contacted for comment this morning.