More than 500 PBS Building creditors are claiming a total of $169 million, far more than the $50 million worth of assets identified by the administrators of the collapsed company.
RSM Australia partners Jonathon Colbran, Richard Stone and Mitchell Herrett have released their 200-page creditors report after a four-month investigation.
They were appointed voluntary administrators of five PBS companies operating in the ACT, NSW and Queensland on 7 March 2023 when 24 PBS Building projects worth $439 million were under construction, including the new Belconnen markets, Doma’s Melrose apartment tower in Woden, Stocklands’ townhouses in The Parks development in Red Hill and the Flexi-living homes in Strathnairn.
New builders have been found for all of these Canberra projects.
The $169 million in creditor claims include $55 million from trades, but the report says all claims are yet to be verified and some are upper-limit estimates.
However, it says the total final value of claims made to date could be more than $50 million less based on the number of overlapping claims and claims that are likely to be reduced by factors such as payments from project trust accounts.
In March, 177 Canberra businesses and individuals had made claims.
More than $6.8 million worth of construction contract payments owed to PBS companies have been identified and pursued under state-based Security of Payment Acts (SOPA), and a further $1.3 million worth of claims are being considered.
Contracts with principals on 22 of the 24 active building projects have ended, in many cases with the assistance of the administrators, paving the way for construction to re-start.
Works have recommenced on at least seven sites, which is expected to result in project principals paying more than $7.8 million to a significant number of sub-contractors and creditors, some of whom have already been paid.
The report says this will indirectly benefit all creditors when these payment amounts reduce the total value of claims.
Mr Colbran said the administrators would hold a face-to-face creditors’ meeting to answer questions in Canberra on 5 July, but they were proposing a 45-day adjournment to give them more time to pursue the outstanding contract payments owed to PBS companies.
He said any decision about the future of the companies was unlikely until 6 September.
“To date, more than $4.5 million of the identified SOPA claims have already been determined in PBS’s favour,” Mr Colbran said.
“These SOPA claims have the potential to produce significant recoveries for the companies – and ultimately creditors – at a cost that is far less, and in a manner that is far more efficient, than if these claims were pursued through the courts.
“A company that is in liquidation cannot pursue such claims under these Acts.’’
Mr Colbran said PBS’s current and former company directors, senior management and staff continued to work with the administrators to support the recommencement of projects and the recovery of assets for the benefit of creditors.
He said PBS Building directors took several steps to navigate the challenges they were facing, including implementing a three-phase turnaround plan.
“However, our preliminary assessment is that the companies ultimately became insolvent on or before 10 February 2023 as a consequence of a number of factors, including being unable to secure the necessary level of additional working capital and additional support,” he said.
If the creditor meeting is adjourned as recommended, a further report to creditors will be prepared and another meeting will be held on or before 6 September 2023 where creditors will decide the future of the companies.