The Cubitt’s Granny Flats and Home Extensions Canberra showroom. No deal has emerged to save the company. Photo: Cubitt’s.
Hopes that failed building company Cubitt’s Granny Flats and Home Extensions might find a buyer have fallen through and the administrator is now recommending the firm be wound up.
That will be put to a second creditor’s meeting on Friday (14 June).
The family company, which operated in the ACT and NSW for 30 years, went into voluntary administration in February owing 200 creditors $3.8 million, leaving 120 projects in train or awaiting payment and 80 staff out of work.
Eleven of these projects were in the ACT, 49 were in NSW, and a further 60 were either in pre-construction or had been completed.
While a full sale did not eventuate, administrators RSM Australia partners Richard Stone and Brett Lord have received an offer to purchase part of the company – intellectual property and the exclusive right to engage with customers under the company’s existing 130 building contracts.
Mr Stone said commercial-in-confidence sale contracts were currently being reviewed.
“We had been hopeful of entering into a deed of company arrangement (DOCA) – a binding agreement between the company and creditors to maximise the chances of it continuing to trade – after identifying more than 40 interested parties and receiving 13 formal expressions of interest,” he said.
“We assessed this would have provided a greater return to creditors than a combination of offers to purchase all or part of the company.
“However, after making available all the company’s financials and other critical business information to two key parties, no formal DOCA proposals were put forward.”
The administrators updated creditors on the progress of the administration and outlined their recommendations for the future of the company in a supplementary report lodged with the Australian Securities and Investments Commission (ASIC) on 7 June.
Mr Stone said there were only three options available to creditors at the conclusion of an administration: execute a DOCA, end the administration and return the company to the directors, or wind the company up.
“Therefore, we have been left with no other option – after almost four months of investigations and negotiations – than to recommend to creditors that the company enter liquidation,” he said.
Since their first creditor’s report in April, the administrators have realised $400,000 from selling assets, including company plant, equipment, motor vehicles, and display homes at Wollongong and Newcastle.
However, despite these and other asset recovery efforts, the administrators have foreshadowed that “it is uncertain whether there will be sufficient funds available to make a distribution to any class of creditors”.
There have been no material changes in creditor numbers or the value of claims since the administrator’s April report.
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