Fighting for subbies rights
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Bloomer director Lachlan McIntosh said today that the work they have done has resulted in excess of 8.5 million being paid to creditors. That is what has been reported to the QBCC today. Most of these funds have been paid by the developers to subbies from unpaid Bloomer claims.
He thanked SubbiesUnited and our advisors for the assistance we have provided. People are being paid money that otherwise, would not have happened.
That's a great result for the majority but cold comfort to the people who to date, have received nothing. They are the creditors who need urgent action right now but we cannot give those people false hope. They should seek their own legal advice from experienced construction lawyers.
Statement from Lachlan McIntosh 24.03.17
"Following is what we have achieved so far, and what we believe is in the process of being finalised.
8.5 million has been paid to subcontractors and suppliers with a further 2.5 million due soon.
There is a further 8.5 million in retentions and cash secured bank guarantees which will come back to Bloomer for distribution.
One difficulty we are having is confirming exactly what has been paid to subbies. In many cases we know a subbie has been paid but we have not received formal communication on this.
This is causing us some grief at the QBCC and we have met them this morning to discuss this.
In our deeds of settlement with developers they must disclose payments to us, so it will be reconciled in due course but at the moment it is pretty confusing.
We will keep working on this to complete what we can complete."
Tracking subcontractor payments
Note: I have sighted a document outlining where the payments came from (not individual) and the totals but the Privacy Act 1988 precludes me from publishing it.
It is extremely difficult for Bloomer to keep track of who is being paid and what the dollar value is unless the subbies inform them and a few developers and many of the subbies are not doing that.
It may be oversight and it may be for other reasons but at the end of the day, there will be a full and final reconciliation and no one will get away with double dipping. Besides that, it's not fair or equitable to those subbies who have not received a cent yet.
Some subbies have received payments from the developer but have left the whole amount invoiced and then inflated the invoices to Bloomer as insurance against the retentions they are owed. That is not helping the cause and is not helping those who have seen nothing. It's being less than transparent and Bloomer would know what is going on.
We subbies expect builders and developers to be fair and transparent, surely we should be the same.
News of this "tactic" didn't come from Bloomer but if you read what Lachlan McIntosh said above, you can see the problems it causes with the QBCC and to date they have been a massive help in getting subbies paid by giving Bloomer a period of forbearance to do what they can.
It came from some of the subbies I have talked to and for the benefit of everyone, especially those that have not yet been paid, I would like them to rethink their strategy because it's hampering the overall effort and will ultimately fail.
It's simple, when you are paid for what was originally a Bloomer invoice from a developer or new builder, inform Bloomer accounts and take the Bloomer invoice out of your system.
Small or large, the amount doesn't matter, that's what needs to be done to make this work.
If the subcontractor has been paid an amount, then the subcontractor should inform Bloomer of that amount so it can be reconciled because some developers are not communicating the payments to Bloomer either.
Maybe they are just too busy trying to get their jobs up and running again but without this information, how is Bloomer supposed to report to the QBCC and subbies and suppliers on how much has been paid and to whom?
Developer and builder relationships
Some developers are oxygen thieves who prey on builders and subcontractors and cause much of the financial pain that subcontractors bear the brunt of.
Builders have to grow a set and form stronger financial relationships with developers to protect their own and subbies interests.
Instead, in many cases, when the pressure is applied by developers, some builders curl up in the foetal position in the corner with their hands over their eyes and ears. They don't want to know about it and don't fight for their subbies. Other builders hide what they can and liquidate the company with the debt.
One builder in trouble said to me on Wednesday, "we are just a bigger version of a subcontractor".
I said "like hell you are, you're the head contractor. Your responsibility is to make sure that your developers and clients pay your claims and pay them on time so that you can pay the subbies who have put their faith and financial security in your hands".
While ever builders think like that, the industry will be a basket case.
I am not a cheer squad for Bloomer but thankfully he didn't think like that and didn't desert his subcontractors en-masse. A few might feel he did but the bottom line is that a substantial amount of money has changed hands with more to come.
Read the CKP thread on the SubbiesUnited forum and take note of what a developer did to CKP Constructions to the tune of 700k. Worse still they cashed in a 200k bank guarantee, throw in a further 200k spent on legals. Then the directors liquidated the company to avoid paying CKP the awarded amount.
As a result CKP yesterday called in an administrator and the subcontractors and suppliers as always, are again the big losers. If you are one of those subbies, keep in mind, administration is not as bad as liquidation. The problem is that they still chew up the money at the same disgraceful hourly rates.
Many of the Bloomer developers have been ok, they are doing their best and are open to negotiations but a few are not. There are a number of examples of inequity.
Our aim
Our aim is to help Bloomer to last as long as possible, to be able to manage and negotiate contracts and subbie payments, do maintenance and collect the retentions and bank guarantees as they become due and return those monies to the subbies who are hurting like hell. I believe the QBCC have the same aim.
We need Bloomer to survive and get as many subbies and suppliers paid as possible but if we don't give them the correct information, it will hurt the collective effort.
For those people who have not been paid, it's a disaster but when the bank guarantees and retentions come in, the hope is that they will receive at least part of what they are owed.