Watersun debts owed to creditors likely to be $20m: administrators
Debts run up by collapsed Victorian construction firm Watersun Homes are likely to hit $20 million, double the original estimates, the administrators say.
“Across the board — employee entitlements, sub-contractor claims, tax office claims and other statutory claims — it’s in the order of $20 million,” Rodgers Reidy director Mathew Gollant said after a creditors meeting in Melbourne.
The hundreds of homebuyers affected by the collapse were told they should find out within a matter of weeks if other building firms are willing to complete about 300 unfinished homes.
Rodgers Reidy, installed as administrators two weeks ago, is negotiating with construction firms.
“We are hoping that we’ll have interested parties to take over the majority if not all of the housing contracts in the next few weeks,” Mr Gollant said.
“If we get somebody to take over the contracts and complete them within the original build price then they [homebuyers] won’t have suffered much of a loss.
“Of course they’ve got the emotional side — that’s not optimal but hopefully they won’t come out of it too far in reverse.
“There will be occasions when they’ll have to rely on the VMIA (Victorian Managed Insurance Agency) to satisfy the unpaid portion of their claims.”
In all there are 800 creditors — including 90 employees who have lost their jobs.
One employee, who did not want to be named, said she knew there were problems and warned of a “ripple effect” across the industry.
“They were good at sales, but bad at management,” she said.
By far the biggest group owed money are the suppliers of building materials and services to the 300 housing projects across Victoria that have been halted as a result of Watersun’s collapse.
“They are unsecured creditors unfortunately. The priority of course is for employee entitlements. They rank ahead of unsecured creditor claims and we made them aware of that today,” Mr Gollant said.
“They took that on board. They wouldn’t be happy about it.”
Bendigo excavation contractor Bill Keeble is owed $10,500.
He told the ABC he had problems late last year with Watersun paying his invoices.
“They’ve been pretty ordinary for while,” he said.
He does not hold out much hope of getting his money back.
“My accountant seems to think it’s a lost cause,” he said
Another creditors meeting is planned for April 7.
“The next step for us is to investigate the affairs of the company and report substantively to creditors,” Mr Gollant said.