A Queensland-based construction firm that has been operating for more than 30 years has plunged into voluntary administration, owing unsecured creditors more than $10.8 million.
Family-owned Carmichael Builders was founded in Dalby in regional Queensland in 1982. The firm grew rapidly, completing projects in regional areas and in Brisbane, and in 2014, was employing 64 employees and turning over $71 million, according to the Courier Mail.
But company accounts seen by the Courier Mail show the construction firm booked a loss of $660,000 in 2014, up from $41,000 in 2013. The Courier Mail also reports Carmichael has been defending a lawsuit from another construction company in the District Court this year.
Administrators Richard Albarran and David Ingram from Hall Chadwick were appointed to the company on June 10, with the first meeting of creditors held in Brisbane on Monday.
In a statement issued on the same day and provided to SmartCompany, Albarran said “it seems the quantum payable to unsecured trade creditors of the company is in excess of $10,800,000.”
“Please note that this figure may be subject to change pending receipt of further information,” Albarran said.
Albarran confirmed Carmichael Builders ceased trading shortly after the appointment of administrators and its contracts relating to the Carinity Aged Care project in Townsville and the Friendly Society Medical Institute in Bundaberg were terminated “shortly thereafter”.
Hall Chadwick is working with the Western Downs Council in relation to another of the company’s projects, the Western Downs Waste and Recycling Centre in Miles.
Albarran said the administrators are “conducting further investigations into the affairs of the company, including the reasons for the failure of the company, insolvent trading and other voidable transactions”. The findings of these investigations are expected to be provided to creditors within coming weeks.
“It is understood that the director is considering his position with respect to proposing a Deed of Company Arrangement for the consideration of creditors,” Albarran said.
“Details of any proposal put forward by the director will be enclosed in the forthcoming major report to creditors.”
In a statement on June 12, the Queensland Building and Construction Commission (QBCC) said Carmichael Builders and its directors “now face exclusion action”.
If an individual is excluded under the state’s industry legislation, they are prevented from holding a QBCC contractor or nominee supervisor’s licence, or being a director, secretary or influential person for a QBCC-licence company for a period of five years.
“A business entering into administration is never a good outcome for those that work in and with the construction industry, and the QBCC takes whatever steps are within its powers to prevent it from happening,” acting QBCC commissioner Kellie Lowe said in the statement.
The collapse of Carmichael Builders comes four years after the Federal Court ruled it, along with two other building firms, had been involved in illegal price controlling conduct in tender processes, known in the construction industry as cover pricing.
Carmichael Builders was handed a $250,000 fine for the conduct, which was related to three state government construction projects in Queensland and one local government project.
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Eloise is an experienced business journalist and editor, who has held senior editorial roles at SmartCompany since 2014. Prior to joining SmartCompany, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry. Eloise has degrees in media and communications, marketing and business management, and political science. You can follow her on LinkedIn, and Twitter at @ellykeating.
