With the appointment of an administrator to Privium, they say all hell will break loose with potential builder insolvencies but we don't think that will happen.
There might be a general clean-out of substandard operators or those who are in over their heads, I know of other builders who will go soon but I read this morning where someone said that "half of all Queensland builders are insolvent". I would like to see supporting evidence of that sweeping prediction as I don't believe it to be true.
There has been a boom in Queensland, partly because of people wanting to escape states that were under what you could call Marshall law such as Victoria with a world record lockdown including a draconian curfew never seen other than in wartime.
Some call it a profitless boom but I hear plenty of people saying they have had a great year.
What was the driver in Privium's demise?
Privium's licence is still current, the QBCC move in mysterious ways but the licence is now irrelevant but it begs the question, has the issue of Torsions licence been resolved from Category 2 - 12 million to Category 3 - 30 million?
Builders have a rise and fall clause in their contracts so while their cashflow might be hampered in the short term by material and labor shortages. They are able to allow for the rise in costs in the contracts but the rises have been massive and its may not be possible to keep up with them for some builders. Inevitably, the losers in the short term are the homeowners who pay for the rises. But the homeowners should win in the end with the shortage of stock and record house sale prices.
Most Qld homeowners are covered by the QBCC Home Owners Warranty insurance scheme. Talk about a conflict of interest with the QBCC judge, jury and executioner but thats an argument for another day.
Privium was successful for many years but their demise has been a long time coming, culminating in a 28 million loss in financial year 2020 and one could only assume compounded by a loss in the financial year just gone. The reason for this may never be known unless the administrators do the job they are so well paid to do.
Where this adminstration will create havoc is with subbies and to a lesser extent, suppliers, especially those who don't have guarantees or debtor insurance, in other words, unsecured creditors. It has already created havoc for home buyers but while they will suffer delays and added costs, most of them will be covered by insurance in various states.
The appointment of the administrator is reminiscent of the early 46 million present Cullen Group gave subbies just before Christmas in 2016. That one is still going 5 years later so this will be no different in the event that FTI stay in the chair, hence the need to remove them.
Lets take them on
If you are happy to let this one pass into history like most builder liquidations do, then do nothing but if you want justice done, let's take them on and change the administrator before they vacuum up anything left and sue every subbie for preferences who has been paid in the past 6 months but who asked Privium for outstanding payments.
It will be a David and Goliath battle but we have won these battles before and can do it again with a well placed stone from our slingshot. We will make every effort to limit the damage to subbies and suppliers.
Any creditors, subbies or suppliers, please contact us at; support@subbiesunited.com.au and we will treat anything you tell us with confidence. It doesn't matter which state you are from.
Thorough investigation
We want to ensure a thorough investigation takes place and while we have no axe to grind with FTI Consulting since they were involved in the first JM Kelly liquidation, we feel there is a better chance of an investigation with a creditor appointed liquidator rather than a "friendly" director appointed administrator, soon to be liquidator.
If we knew who the appointee was prior to todays announcement, it must have taken some time to arrive at this point.
Subbies join here and access our private members forum, we offer two membership options, 6 or 12 months. We make exceptions for some suppliers that we trust and who call us first but in general, if you are not a subcontractor, don't bother joining. We have our ways of weeding you out before you can access the forum and we will not refund your membership fee.
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