Liquidator appointed for collapsed NSW builder Reed Construction
Failed NSW builder Reed Construction has been placed in the hands of a liquidator following a successful winding-up petition to the NSW Supreme Court from creditor SCE Group.
SCE Group is a raw materials management group of companies.
Mark Robinson, partner at PBB Advisory, has been appointed as liquidator of Reed Construction.
Robinson told the Australian Financial Review it was possible that alternatives could be found to liquidating the company that would provide a larger return to creditors.
Reed Construction and another related company RST Nominees were placed in voluntary administration on June 15 with Ferriers Hodgson partners John Melluish and Ryan Eagle appointed as administrators.
Melluish and Eagle will hand over a creditors’ report to the liquidator today.
Reed has debts of $182.1?million after suffering losses on several key government contracts.
All payments to creditors were frozen on June 15, with administrators saying at the time that there might be insufficient funds to pay employees their entitlements.
St George Bank is a secured creditor and owed $48.1 million, while trade creditors and over 1,000 subcontractors are owed $78.7 million.
Former employees are owed $5 million.
Founder Geoff Reed blames the collapse on a decision by the NSW government’s Roads and Maritime Services and Department of Education and Communities to prematurely terminate contracts with Reed Construction.
Reed says contractors are owed $60 million on these projects.
The June 27 creditors’ meeting revealed that the company had claims against the NSW government, a claim of $15.5 million against MidCoast Water and $13.4 million from 20 other debtors.
Yesterday, another prominent NSW builder, Baseline Constructions, was placed into voluntary administration owing $65 million, joining Kell & Rigby and St Hilliers Construction, which have also collapsed recently.
A second creditors’ meeting was due to be held on July 20, where it was to be decided whether to execute a deed of company arrangement or whether the company would be wound up.