Fighting for subbies rights
If you are unsure on which is the best position for your company, you should seek your own legal advice. SubbiesUnited does not provide legal advice.
In the next few weeks the company Bloomer Constructions (Qld) Pty Ltd, will be proposing a Deed of Company Arrangement (DoCA).
While all the facts and figures are yet to been quantified, the basics of the proposal will be that all future funds received by Bloomers will be distributed to the creditors (mainly Subcontractors & Suppliers).
Generally, the opportunity for a builder in administration to recover funds will be in the form of retentions, unpaid progress claims and contractually agreed surplus funds from projects that have been novated to other builders or clients.
Over the past 3 months, projects have been handed over to others including developers and builders for completion.
There is a person associated with SubbiesUnited who has been appointed to ensure that the very best financial outcome is achieved for subbies and suppliers.
Part of this process was that both parties including Bloomers & Builder- Clients, have a final reconciliation of the project accounts with any surplus funds from the projects being paid in priority to subbies with charges and then unsecured creditors, the majority who are subcontractors.
The quantum of recovered funds are estimated to be in the millions so if we stick together, we will get a return.
If you are not insured, For this reason, it is important that all subbies and suppliers consider uniting together and make sure the company doesn’t go into Liquidation.
The Difference Between Liquidation and Administration
The primary difference between the two procedures is that;
- The company in Administration aims to help the company repay debts to creditors in order to escape insolvency (if possible).
- The winners here are uninsured & unsecured creditors.
- The company in Liquidation is the process of selling all assets before dissolving the company completely.
- The winners here are secured creditors, Liquidators and Lawyers.
Wind Up leading to Liquidation
Currently, there is a Wind Up court actions against Bloomers. The opposing parties have suggested Liquidators be appointed.
If they are successful, it will destroy any chance of a Deed of Company Arrangement. The flow on effect will be that the unsecured creditors will more than likely get nothing which is the norm for this industry.
This will not be a good outcome at all for subcontractors and suppliers so we must be united and keep Bloomer in Administration.
Please look for further updates.
Tough Times
We know that subbies are doing it hard but please consider a donation to Subcontractors Alliance.
They have been at the coal face fighting for subbies rights for years and doing it at their own expense. The time has now come to support them.
Please click here to donate to Subcontractors Alliance and help this great organisation help you.