The Parks townhouses in Red Hill was one of the projects affected by PBS Building going into voluntary administration. Photo: Ian Bushnell.
Collapsed building company PBS Building could be forced to liquate four of its five companies as part of recommendations from its administrators.
Earlier this year, RSM Australia Partners were appointed voluntary administrators of PBS Buildings’ five companies operating across the ACT, NSW and Queensland.
The administrators have recommended creditors put four of these into “immediate liquidation”, including construction companies in Canberra and Queensland.
However, a different decision has been recommended for PBS Building NSW (PBSB NSW).
Instead, it’s been suggested those creditors enter into a Deed of Company Arrangement (DoCA) with litigation under Clover Risk Funding.
This is a binding arrangement between a company and its creditors which governs how the company’s affairs will be dealt with.
“We expect that the creditors of PBSB NSW are likely to obtain a better return, in a shorter time period, should they vote that PBSB NSW enter into a DoCA,” RSM Australia Partners wrote in their latest report.
“Critically, the DoCA will provide time and enhance our ability to recover progress claims via SOPA (Security of Payment Act).
“The claims have an adjudicated value in excess of $3 million.”
RSM Australia Partners’ Jonathon Colbran said this proposal had only been secured for the NSW arm because of the value of the outstanding SOPA claims being pursued.
He described this as a “materially different” position to the other four PBS companies.
“This DoCA proposal is a complex solution to a complex administration which would allow the administrators to continue our legal pursuit of contract payments we believe are owed to PBSB NSW and its creditors,” Mr Colbran said.
“The funding support that will be provided under the DoCA proposal will assist us to maximise the prospects of preserving and returning value to creditors.”
A creditors report in June stated more than 500 creditors had claimed a total of $169 million.
This includes 177 Canberra businesses and individuals.
PBS Building went into voluntary administration in March, owing $25 million at that time.
Affected ACT projects – which have all now found new builders and resumed construction – included the new Belconnen Capital Food Market, Doma’s Melrose tower in Woden, Stocklands’ townhouses in The Parks development in Red Hill, and the Flexi-living homes in Strathnairn.
Creditors will vote on the future of the five PBS Building companies currently under voluntary administration at a final meeting in Canberra on 6 September.
Mr Colbran said a final report, containing material updates on the progress of administrations and their final recommendations, had been given to creditors so they could make an “informed decision” at the upcoming meeting.
“Our recommendations are based on six months’ worth of investigations into the companies and an extensive asset recovery program, both of which have been focused on achieving the best outcomes for creditors,” he said.
“Given the limited time since our June report, there has been no material change in creditor numbers or the value of claims.
“However, as previously advised, we anticipate these numbers are likely to reduce as a result of already identified examples of overlapping claims.”
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