We are seeing new scams invented by builders to avoid paying or communicating with subbies.
Maybe not new but certainly a lot more "avoidance" schemes are in play and executed with precision compared to the past 10 years since the Waltons Construction rort in 2013. Its a pity these bastards weren't as good at building and running their companies.
This week we have had giant National company PBS Building appoint an administrator, soon to be a Liquidator who, with his lawyers will be rubbing their hands together with glee. Christmas has come early for the appointees.
Subbies sometimes think, because it's a National company, it's safer to work for but PBS is an example of why that's not true.
Love it or hate it, the QBCC MFRs put the financial records of builders under scrutiny at least once a year where other states might not do that so no one knows whats going on outside Qld.
No one knows here either except the QBCC but a subbie would have to think that if they have a valid licence, they are not trading insolvent yeah? Oh, yes I hear you, financial docs can and often are falsified.
PBS directors released this statement:
From the Courier Mail;
"A statement released by the directors described the action as a “incredibly difficult decision”. “This has been a gut-wrenching decision that we know will impact many lives and livelihoods,” the statement said.
“However, after months of intense efforts behind the scenes, in the end it was the only responsible course of action available.
“In relation to our current projects, we secured, not abandoned, these sites with the express purpose of not incurring any further expenses.
“We took this step to ensure that we could negotiate better outcomes with clients for the ultimate benefit of creditors.”
Adminisatrator Mr Colbran said the five PBS companies had 80 residential and commercial projects in various stages of construction".
I have news for the directors of PBS, the only people who will have "better outcomes" will be secured creditors, Liquidators and Lawyers. Free boozy lunches paid for by lawyers will abound for the liquidators.
The rest of the creditors will get the usual sweet fxxk all.
There are a large number of building companies under discussion on our private members only forum. Much larger than usual.
For some subbies its too late, for others, they will have avoided working for the scum of the industry who don't even have the decency to answer phone calls or emails.
I will outline corruption which is happening right now. One of the new schemes is to have a share buyback and complete it at least 6 months before step 2.
Its a complete waste of time writing to the QBCC about all the shit going on as they operate under a cone of silence designed to protect the guilty. The QBCC Act is a sham. When we do write, we get "we cannot discuss current investigations".
Step 1 The buyback is where, over a period of months, the director of the company deems it fair that the company pays himself (the director) and his wife an amount per share, lets say $1 = 2.4 million for their shares (worthless to the company), bleeding the company of all cash but filling the director and families accounts to overflowing. Ensure the buyback is complete more than 6 months proir to liquidating to avoid the relation back period (6 months).
Step 2 Christmas has arrived so shut the office, remove all assets, sell what you can, hide good shit in one of your houses and board up the windows. "Have a super Christmas guys, will see you suckers in the new year, 2023 LOL LOL NOT!
True story, this actually happened and last week, a subbie caught the builder removing valuables from a house with shuttered up windows and fronted him as he was emptying the house.
Turn phones off and completely ignore emails.
Step 3 Simply go to ground over the Christmas break, into January, February and beyond.
Don't answer the phone, avoid avoid avoid and wait for a creditor or the ATO to start a Winding Up Application.
Step 4 After an avalanche of monies owed complaints, the QBCC finally gets off their woke, lazy, shiny fat arses and they put restrictions on the builders licence who has done the disappearing act months ago and they then very kindly give the builder a further 28 days to respond.
Note to QBCC: A further 28 days is a luxury subbies cannot afford.
The joyful builder is dancing around like Billy Connolly on stage going tra la la la la.
By this time, the builder has not been sighted for 3 months with all jobs other than the daughters development, sitting idle. The daughters site is fairly humming along. (not all subbies are members of this site)
Step 5 Some subbie who is by now slowly bleeding to death financially, decides to put this rabid dog down and files a winding up application. This adds cost to his losses but he is doing the industry a service because the QBCC or ASIC won't.
ASIC or the QBCC never prosecute these building company directors despite overwhelming evidence of fraud. ASIC does nothing despite numerous notices from the Liquidator in regard to insolvent trading and the QBCC may ban the builder for 3 years and smugly close the book on it. Their job here is done.
Some subbies go broke because of the loss and end up back on the tools.
All their retentions are lost and those that had the fuxking hide to actually ask for payment by email and were lucky enough to be paid a portion of what they were owed, will be sued by the greedy liquidator for preferential payments going back 6 months from the time of liquidation. Their excuse is we must uphold the law as we are Orifices of the Court, its for the benefit of all creditors but guys, can any of you tell me a time when you actually got a cent return from a liquidator?
No I thought not, all the money is soaked up in fees. Some of these bastards actually charge above and beyond $800 per hour and get away with it so how would a subbie ever benefit from a preference?
What is a win win for the sanctimonious Officers of the Court is a loss loss for subbies and other unsecured creditors.
In November 2022, The Subcontractors Alliance and SubbiesUnited with the assistance of our brilliant legal advisor, put together and sent a 20 page submission in regard to the treatment of Subbies retentions and preferential payments to a Parliamentary Joint Committee on Corporations and Financial Services - Corporate Insolvency In Australia.
It must have met their criteria as they accepted and published it.
We were then invited to appear before them to give evidence.
For those interested, here is my teleconference interview with the senators.
If I have hurt someones feelings in my scathing description of what has happened in the various rorts including the Cullen liquidation, then too bad.
It's not possible to keep the emotion out of it when you see the fraudulent activity by builders described above, almost on a daily basis and know how if affects subcontractors and their staff and families.
Cullen should have been wound up a long time ago.
Borrowing money from FEG (ATO) to sue subbies who paid those taxes in the first place is not right. The tax we pay is being used to sue us for preferential payments.
We all know there is no pot of Gold at the end of the Cullen rainbow despite over 6 years of promises, now in its 7th year. I could have said a lot more, its rare that what I say is covered by Parliamentary Privilege but I only had 1 hour on the soapbox.
Subbies add a level of protection to your business and join SubbiesUnited and make use of our private members forum for up to date information but a warning, do not join if you are NOT a subcontractor, we will weed you out, you are not welcome.