Fighting for Subbies rights
Industry experts tell me that we are on the cusp of a unique opportunity.
It is imperative that Bloomer Constructions retain their licence to give themselves time to finalise arrangements that could deliver subcontractors a remarkable outcome from a huge building company collapse.
We understand that:
- Bloomer Constructions has ceased trading
- As such they are not incurring any further expenses, debts or liabilities
- They have confirmed that Subcontractors & Suppliers are not incurring further losses on any projects.
Their actions at the moment are focused on:
- Mitigation (minimising) of subcontractor losses by novating projects (the act of replacing one party in a contract with another) to other builders or,
- Having the Developer (client) directly engage subcontractors to complete works through Project Bank Account's.
So far, they have successfully reduced subcontractors exposure or liabilities by millions of dollars through theses negotiations.
Given the fragile nature of these negotiations, the stakeholders involved need to be mindful of any decisions that may adversely impact on the current deals and negotiations with the project clients.
Stakeholders exposed to these negotiations are:
- Subcontractors
- Suppliers
- Insurers
- Banks-Financiers
- Clients-Developers
- QBCC
Adverse finding
Ultimately if the QBCC provide an adverse finding - (license suspension), it will destabilise the current deals.
It will impact all deals that have been successful and stifle current negotiation to get Subcontractors and Suppliers paid as soon as possible.
An alternative proposal
Creditors Voluntary Agreement (CORPS ACT 2001 - SECT 411).
A CVA is a deal between the company and its creditors or in this case Bloomer, and Subbies, to repay them from future proceeds or a deal may be written to collect retentions, sell assets and pay back Subbies from the proceeds.
The deal is based on preserving the company, completing current projects and collecting value and paying something back over a period of time to be agreed.
Directors remain in control, personal guarantees don’t get called in (under normal circumstances) and it gives the builder's business a fighting chance to survive.
Subbies would compromise their debts to the value of work in progress (WIP), Retention's & Unpaid progress claims.
All future work is paid in full from Project Bank Account's.
In theory, it should amount to nearly 100 cents in the Dollar - However more likely to end up around 60 to 80 cents in the dollar.
Still far better than liquidation.
The process needs 75% of Subcontractors to approve.
The process is secured with court orders (Bloomers to pay costs).
I am calling on all Bloomer subcontractors to support the CVA, to email me so I can pass it on to the QBCC. You can also leave a message in the comments section below.
Email to - support@subbiesunited.com.au.