Fighting for Subbies Rights
UPDATED 28.06.17 at 4.55pm.
The DoCA vote carried the day.
This was a win for Subbies. In the past they have not had a voice.
Now with SubbiesUnited, they do and while we are all losers in this to a degree and some more than others, this is the best result we could expect.
The vote was approximately as follows:
For the DoCA - 70 votes and 12 million in value.
For Liquidation - 20 votes and 4.5 million in value.
Without related preferences (Bloomer and Onterran):
For the DoCA - 60 votes and over 6 million dollars in value.
For Liquidation - 20 votes and 4.5 million dollars.
For the record and after an analysis, I have been told by an industry expert that our company is not exposed to preferential payments.
Bottom line:
I didn't spend all these hours on this for myself, I didn't do it for the money because there was none, I didn't do it for Bloomer Constructions or Onterran.
I did it for the benefit of subcontractors and while I know some people have said I have personally benefited, that is an outright lie and will be proven in due course.
Please note: The file is too big to attach all supporting documents.
The David & Goliath battle continues..
CREDITORS MEETING IS ON TODAY AS PLANNED AT THE TIME & ADDRESS BELOW.
It's time subbies made a difference and gave "the boot" to the lawyers who have fought tooth and nail to put Bloomer Constructions into liquidation.
The following DOCA V liquidation explanation is written by an industry expert and SubbiesUnited advisor.
It explains in detail why it is important to either come and vote tomorrow, or fill out the forms you can find here and email them though this morning. The meeting is at 11am.
Email to rberry@atlasgantt.com or support@subbiesunited.com.au
Read on...
Bloomers in Liquidation is not good result for subcontractors or suppliers - Period.
As unsecured creditors, subbies and suppliers rank a distant last to get their money back. The Deed of Company Arrangement does not offer wagons of gold, nor will it pay the mortgage or put food on the table.
However, Subbies caught by Bloomers need to dodge the biggest insolvency bullet - preferential payments!
Speaking to many of Bloomers creditors, i have heard the repeated words -
"We are just a small family business, the Liquidator would chase me".
Unfortunately, due to the long payment terms in construction and acceptance of late payments, subbies are easy pickings for a preference claims from a Liquidator.
In general terms, a Liquidators duty is to recover assets of the business. Assets by definition can included project debtors (developers), plant & equipement, insolvent trading claims and voidable transactions/preferential payments.
As a subbie- Take a moment to consider the easiest asset for a Liquidator to recover??
Projects Debtors? No.... Drawn out and expensive battle against developers can take years and cost millions in legal fees (money Liquidator doesn't have).. Chances of getting a funds back after paying legal fees and Liquidators costs are slim at best. All standard building contracts have clauses regarding an insolvency event (ipso facto), this allows the developers to terminate the contract and withhold all payments due to the builder until the projects is complete and final accounting is done. Additionally Sect 553c corps act allows set-off costs of debtors account with the company. Either way, in liquidation the chance of the asset being available for distribution to creditor is Buckley's or none.
Plant & Equipment? No.....Bloomer like most builders have very little plant and equipment. They rely on subcontractors to provide the machines, scaffold, transport and plant to deliver the project. So again no assets available for creditors.
Insolvent Trading Claims? Maybe. Perusing the Directors and/or shadow directors for insolvency trading generally gives rise to huge claims and cross claims. It's a lawyers dream job. It costs a lot and there is a good chance, that if the Directors had an insurance policy, the underwriters may fund the legal defence. Meaning years of legal jousting and no material outcome for unsecured creditors.
Voidable Transactions (Claw-Backs)? YES .... Logic would stipulate the majority of Builders payments are to subcontractors and suppliers. Many subbies questioned, how does this work?
The Administrators report indicates a February date as the point that Bloomers became insolvent, however some proponents suggest it may have been as far back as October 2016. How much in payments have you received since that date?
The take away point is that if a Liquidator claims any of the payments received by subbies (You) are voidable, the onus of proving the defence rests with the person claiming the defence- YOU (Levi v Guerlini (1997) 24 ACSR 159; 15 ACLC 913).
Meaning it's up to you to prove that the payment you received is not voidable- Guilty until proven innocent- it will cost you thousands for lawyers to defend (guilty or not).
Liquidation basically comes down to this, and the winners are.... The lawyers!
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Hume Doors case in the Supreme Court has been adjourned again. It was a QC, Barrister and lawyer fest of mammoth proportions, a real sight to see.
There were more wigs than in a best bald head competition.
If you are not attending the meeting tomorrow, only sign the proxy vote & proof of debt forms if you haven't already done so as the previous forms carry over due to the court adjournment.
For any creditors who support the DoCA, fill out the forms and email to rberry@atlasgantt.com, or come to the meeting and vote in person.
Here are printable versions of the forms for your convenience.
Creditors should read this report and make their own informed decision on which option is best for your company.
This is a lawyers feeding frenzy at the moment and all that does is burn creditors money, making it less likely for a decent financial result for unsecured creditors.
To date, Hume Doors and other windup actions has accumulated hundreds of thousands of dollars in costs to defend their action, money that could have gone to creditors.
Read the latest comprehensive BCQ Supplementary 439A report here.
Subbies, please feel free to post any concerns or questions here. Alternatively, contact the Administrators, their details are on the report.
