BEFORE YOU BUY A HORSE CHECK ITS TEETH…

Or the books, or the state of the train wreck!

28-02-2022 High Noon

The photo below is to help Deloitte in their race to find a buyer.

Thats the same Deloitte who have been working with Probuild over the last 2 years prior to being appointed as the Probuild administration last week.

Note that administrator Deloitte has been advising Probuild over the past 2 years, has invoiced 500k but claims there is no conflict of interest.

Not sure the value of the advice given although I guess Probuild lasted for 2 mores years so maybe it was value but what about the trusting subbies and suppliers who have done their money?

"Deloitte Australia has been advising Probuild over the last two years, billing more than $500,000 which was not part of the voluntary administration, but it says this does not present a conflict"!!!!

At the risk of upsetting the apple cart, I have to be honest, maybe it doesn't present a conflict as in a fight or a war but surely it presents a conflict of interests when Deloitte have advised the company for 2 years and know the operation.

The only way for Deloitte to handle the administration and for it not to present a conflict of interest is if Deloitte performs the administration followed by the liquidation free or charge. In other words, they gain no financial benefit from the knowledge gained after working with the group over the past 2 years but what are the chances of that happening?

At say $700 per hour, thats potentially 714 hours and possibly up to 1,000 hours they have billed. Thats a massive advantage.

Surely Deloitte has a running start and will derive a financial benefit from the inside knowledge garnered over the past two years.

Was it pre insolvency advice Deloitte provided?

Half a million paid to Deloitte over the last 2 years in advisory fees …… But no conflict ???

As if they didn't know their financial exposure and risk. The issue of conflict just beggars belief, the thought that Deloitte is not heavily conflicted is absurd. Furthermore, the thought that they think the public will buy that is even more absurd.

Mr Algeri refused to comment on why WBHO decided to pull the pin on WBHO Australia after saying they would provide 12 months of financial support four months ago."

Refused to comment? Is Deloitte working for all creditors or just WBHO, the banks and insurance companies? Does he know but won't say?

In the 2 years they have advised Probuild, I would be interested to know if the Probuild management informed the QBCC of the financial woes of Probuild and how Probuild managed to pass their most recent MFR's.

Other than the denial of a conflict of interest, three things have struck me about this Courier Mail article on the 25th February.

The first thing is the open admission that Probuild has a history of underbidding and cost overruns.

"Despite Probuild’s history of underbidding and cost over runs Mr Algeri said he could not comment on whether a new owner would continue the practice."

The second is the expectation that "the bigger fool theory" is so prominent in the logic of the administrators.

Imagine a builder buying a profitless body of work and continuing the practice of underbidding and cost overruns to continue the losses and end up in administration, soon to be liquidation like Probuild has.

What an excellent business model.

Anyone who would buy a pipeline of work with no profit in it would have to be pretty dumb and to continue the practice of underbidding even dumber so the potential sale of Probuild could be a case of dumb and dumber.

The third is the administrator saying there is no conflict of interest, that is a laugh but I am not surprised at anything a liquidator would say. I am just struck by how stupid they think the public is.

Probuild has done nothing but cause harm to the industry and good builders and needs to be put out of its misery, not re-birthed as is being suggested.

If they are re-birthed, will subbies be paid their retentions Australia wide?

I can answer that, no they will not!

Considering Deloitte's involvement and all the banks as secured creditors the biggest reportedly being Suncorp, it brings to mind the Walton Construction liquidation.

Let's see how the banks come out of this one.

On that subject there is currently a class action in progress seeking 100 million damages in regard to the handling of Walton Constructions by various parties.

The question has to be asked, how did Probuild pass their most recent MFR's.

Was the QBCC and ASIC informed of Probuilds financial woes?

SubbiesUnited would like nothing better than to see a good outcome to the Probuild debacle but given the history of administrations and liquidations, its always those at the bottom of the food chain who lose the most and considering the poor management and business model, there will be no fairytale ending for Probuild.

The moral of the story is before you buy a broke, undercutting, underperforming, unprofitable train wreck of a building company with cost overruns, check its teeth.

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