A construction company in Queensland has collapsed, owing about 115 unsecured creditors around $850,000 and leaving six homes half finished.
Seachange Caloundra, a construction company based in Little Mountain that operated the Hotondo Homes Caloundra franchise, went into liquidation on August 26.
The first meeting of creditors will be held on September 14.
A number of sub-contractors have been affected by the closure, with affected creditors telling a local newspaper they have been left out of pocket by the firm’s collapse.
The company, which employed about four non-director employees, also had its builder licence suspended six times since 2008 for reasons that varied from renewal notice failures to audit compliance issues.
The business’s builder’s licence was held in the name of Ian Gemmel.
Liquidator Glen Oldham of Oldham Liquidators told SmartCompany the franchise agreement between Hotondo and Seachange was terminated the day after the company entered liquidation.
Oldham says while the company, which has a total of four employees, had not prepared its accounts for the last financial year, in 2014 it turned over $2.7 million.
He says 115 unsecured creditors, including subcontractors, had been caught up in the collapse and were owed about $850,000.
Oldham is also in talks with a couple of secured creditors and preferred employee creditors as well, including four non-director employees.
Poor financial advice is believed to be behind the liquidation.
“We’re looking at poor professional advice in the past, accounting and bookkeeping,” Oldham says.
“Principally there was a finance facility the company held, demands were made on that around the time it sought the appointment, and someone wanted immediate payment.”
Oldham says a lot of effort is being made to help affected owners of six partially complete properties caught up in the collapse.
“We’ve had conversations with Hotondo about head office trying to assist with impacted homeowners,” he says.
“Some owners have been to see their solicitors and have taken relevant steps to terminate contract
“We’re directing them to seek legal advice or the Queensland Building and Construction Commission.”
Caroline Kennedy, chief executive officer of Hotondo Homes, told SmartCompany this morning the franchise had been in direct contact with customers affected by the incident.
Kennedy says Hotondo had advised them they had options, especially in regards to Home Warranty Insurance.
“All customers are protected by Home Warranty Insurance,” she says.
“We are working closely with the administrator to understand the potential impacts and assist where we can.”
“The administrator is responsible for the client contracts and for assigning contracts over to the clients’ nominated builder.”
Kennedy says the appointment of a new builder is at the discretion of the client and Hotondo has offered to assist.
“We have regular contact will all clients, and we are providing advice and ongoing support,” she says.
SmartCompany contacted Ian Gemmel but did not receive a response prior to publication.
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