Subbies screwed
Double hit a concern
GOLD Coast subbies are being hit twice in the pocket in what they say is a gut-wrenching turn of events in the liquidation of the Cullen Group. Some may have to pay millions of dollars back.
Documents obtained by the Bulletin show some subbies received what the liquidator alleges are preference payments in the six months before the company collapsed in late December 2016.
In a stunning turn of events, 29 subcontractors still owed money and part of the liquidation have been told a claim has been made for a total of more than $8.4 million because “the respondents received unfair preferences”.
A subbie told the Bulletin: “I don’t think it’s morally right. People are working out the cost of legal proceedings (to fight this order). It’s pressuring people to pay. It doesn’t take into account the money we spent on the project and the money we lost.”
Some of the amounts being identified among plumbers, landscapers and concreters include $2.4 million, $953,000 and $771,000. A subcontractor still owed $590,000 will have to pay back millions.
“We’ve paid for all our tradies. It’s horrible. We built two towers that were almost 99 per cent complete. It’s a joke.”
Lawyers for the liquidator gave the subbies a deadline of Wednesday this week to respond so a hearing could proceed.
In an affidavit to the Supreme Court, liquidator Michael Caspaney said investigations since his appointment in January 2017 had considered various transactions with Cullen during “the Relation Back Period”. He said he had considered whether the payments would be considered “voidable” due to unfair preferences. His view was the Cullen Group had been insolvent “from at least January 1, 2016”.
The subbies who received the payments in the six months prior to the winding up say it was impossible for them to know the developer was having financial problems.
After construction stopped on the Robina accommodation tower site just before Christmas 2016, Bulletin reports detailed the inside story on the Cullen Group’s collapse.
A month later, in January 2017, the State Government ordered an investigation into how hundreds of subcontractors were not warned about the collapse of a building company.
The Cullen Group only had its building licence suspended on December 15. The Queensland Building and Construction Commission rated the builder as a $30-60 million company.
In his affidavit, Mr Caspaney wrote: “Cullen remains indebted to unsecured creditors in the sum of not less than $37,000,000. At this stage... it is unlikely that Cullen’s unsecured creditors will receive a dividend of more than five cents in the dollar.”
He argued the subbies had received more than what they would have obtained “by way of a dividend in the liquidation of Cullen”.
Taylor David Lawyers, acting on behalf of Mr Caspaney, said there were 657 unsecured creditors in the liquidation.
“Based on the liquidator’s investigations, the 29 creditors subject of the Supreme Court proceedings received payment in preference to other creditors ... These proceedings seek to recover payments made preferentially to fairly and equally distribute amongst the 657 creditors,” the statement said.