An Australian construction company has gone into liquidation after racking up almost $1.5 million in debt, leaving clients in the lurch waiting for faulty construction to be rectified.
Melbourne-based Argyle Building Services was placed into administration on August 23 and owed $1,474,932 to 55 creditors.
Among the dozens of creditors are six Argyle employees who are owed $191,538 in retirement and unpaid annual leave.
Cor Cordis administrator and chief executive Daniel Juratowitch was unable to save the business and was appointed liquidator this week.
At the time of its collapse, Argyle had been building a major project in Williamstown consisting of eight townhouses, a commercial store and an apartment.
At a recent meeting of creditors it was heard that several clients had been affected by the defective constructions.
Industry suppliers were also among those owed money by Argyle.
The company was started in 2011 and specialized in medium-density residential developments.
Melbourne-based construction company Argyle Building Services has gone into liquidation after racking up almost $1.5 million in debts, including unpaid pensions for six employees (pictured).
Argyle director Sam Salloum blamed his company’s collapse on “numerous unpaid invoices” from developers who also became insolvent.
Salloum claimed that the developers “simply refused to pay” debts exceeding $2 million.
“Simply put, everything that could have gone wrong, went wrong,” he told Herald of the sun.
The company was forced to stop work on a house in Toorak and another project in South Yarra mid-construction due to unpaid invoices.
The domino effect resulted in the collapse of Argyle, leaving a large concrete supplier asking to collect abandoned materials at the stalled Williamstown project.
A resident of an apartment built in Argyle told the meeting of creditors that he could not live there for the past year due to numerous faults.
He said he had gone to the Victorian Civil and Administrative Tribunal to try to rectify the rulings as there was no insurance available for his property.
Another resident of the same complex asked if there was a possibility of litigation for negligent construction practices.
The writing appears to have been on the wall for months, with one anonymous Facebook user warning others about doing business with Argyle.
In February they published that Argyle had only paid 25 percent of what was originally agreed “almost 12 months” earlier and that in the meantime they had received “nothing.”
The company director blamed a domino effect on the insolvency of other contractors, leaving him with more than $2 million in unpaid bills. Pictured is an Argyle construction project.
Juatowitch confirmed in a report to creditors that the company owed withholdings and debtors, some of which may be subject to dispute due to defective works.
“In the period leading up to the appointment, the company was the subject of several legal proceedings, in particular in relation to the claim for amounts from debtors,” he wrote.
Initial investigations by the administrator revealed that Salloum may have continued trading while insolvent.
“My preliminary view is that the company may have been insolvent prior to the appointment of the administrator,” he wrote.
“In this sense, in the event of liquidation of the company, the administrator could be exposed to a commercial claim for insolvency.”
A more detailed report on the matter and whether the company had recoverable assets or claims is expected to be addressed by the end of the year.