List of Metro Builders victims grows longer
METRO Builders' debt continues to deepen as the list of creditors grows longer following the company's shock financial collapse.
There are believed to be 41 secured creditors owed around $1.6 million and about 200 unsecured creditors with an amount, which is yet to be confirmed, outstanding.
It appears the prospects for secured creditors is looking bright with the initial liquidation report from national insolvency firm Jirsch Sutherland suggesting that there should be enough money to pay back all 41 involved utilising the company's assets.
However it is a different story for unsecured creditors.
Craig Carrington, from Rockhampton's branch of EC Credit Control, said the liquidators responsibility was only to secured creditors and unsecured creditors would only see their debts paid back if there was any monies left over.
Mr Carrington said unsecured creditors could have easily become secured creditors and first in line for debt repayments for just a small once off payment of $6.80 for seven years protection through the Personal Property Securities Register (PPSR).
"The advantage of the PPSR is that it protects businesses whether it be small sub-contractors turning over $5000 a year or a person working for a builder who is on commission only,” Mr Carrington said.
"Through the PPSR you are registering that a person/business has a line of credit with you and you are a secured creditor. What that does is speed up the legal process and the process for debt collection.
"For the 200 unsecured creditors $6.80 would have moved them to the top as secured creditors.”
Mr Carrington said while investigations were ongoing, it was understood that Metro Builders had been insolvent for around two years prior to going into liquidation.
"They were insolvent from the point they bought the $2.6m mansion in Lammermoor,” he said.
Mr Carrington said fortunately in this situation there appeared to be enough money to pay back secured creditors.
However if there were more secured creditors and not enough money to cover the debt, then preferential payment would come into play.
This essentially means that the liquidators can "claw back” payments from six months before the date the company went insolvent.
"Under preferential payment it is six months prior to the date they went insolvent, in the case of Metro Builders it could be 2.6 years in which the liquidators could actually claw back payments,” Mr Carrington said.
"So not only is it only the unsecured creditors but it also includes people who have done work for them in that time (2.6 years) who can be contacted as well to pay a percentage of what money is owed to secured creditors.
"The unsecured creditors have been paid in preference to the secured creditors which is the obligation of all businesses.”
As for the direct employees of Metro Builders, Mr Carrington advised that they were covered under the Department of Education scheme also commonly referred to as the DOE system.
"That is where the government will pay out their outstanding wages,” he said.
"They (employees) will get two weeks severance and four weeks long service, they don't get their super or any bonuses or commissions they had.”
What's happened so far
- June 12 - The news of Metro Builders closing its doors breaks and people are left with homes half-built or not even started.
- June 13 - It is confirmed that Metro Builders has gone into administration. It is believed 24 homes are left unfinished and sub-contractors, suppliers, and home owners are left out of pocket by more than $2 million.
- June 13 - Neighbours report seeing removal trucks coming and going from Metro Builders owner Glen Finning's $2.6m Lammermoor mansion.
- June 14 - Metro Builders is turned over to national insolvency firm, Jirsch Sutherland and they begin their investigations.
- June 14 - The Queensland Building and Construction Commission starts to contact home-owners from Metro Builders to help them navigate the situation and confirms it suspended the licence of Metro Builders on June 11.
- June 16 - Liquidator Jirsch Sutherland confirms it will make the trip to Rockhampton to inspect the company's developments and recover company assets. Debts are confirmed to be $1.7m.
- June 19 - It is revealed that owner Glen Finning's home is owned by the Metro Builders company.
- June 21 - Liquidators announce that the number of homes affected by the business collapse is actually 40. Some of the contracts are passed onto other builders.
- July 14 - Local builder Chris Warren Homes takes on at least nine clients caught up in the Metro Builders collapse and promises to have the homes completed by Christmas.