Melbourne building company Argyle Building Services collapses owing almost $1.5million to more than 50 creditors
An Aussie construction company has gone bankrupt after racking up almost $1.5 million in debt, leaving customers in the lurch waiting for defective construction work to be fixed.
Melbourne-based company Argyle Building Services was placed into administration on August 23, owing $1,474,932 to 55 creditors.
Among the dozens of creditors are six Argyle employees owed $191,538 in unpaid pension and annual leave.
Administrator and CEO of Cor Cordis, Daniel Juratowitch, was unable to save the company and was appointed curator this week.
At the time of the collapse, Argyle was constructing a major development in Williamstown, which consisted of eight townhouses, a commercial store and an apartment.
At a recent meeting of creditors it was heard that a number of customers had been affected by the defective structures.
Industrial suppliers were also among those who owed Argyle money.
The company was founded in 2011 and specialized in medium-density housing projects.
Melbourne-based builder Argyle Building Services has declared bankruptcy after racking up nearly $1.5 million in debt, including unpaid pensions for six staff (pictured)
Argyle director Sam Salloum blamed “numerous unpaid invoices” from developers who similarly fell into insolvency for his company’s collapse.
Mr Salloum claimed developers “simply refused” to pay debts that exceeded $2 million.
“In short, whatever could have gone wrong, did go wrong,” he told the newspaper Herald Sun.
The company was forced to stop work on a house in Toorak and another project in South Yarra mid-construction due to unpaid bills.
The domino effect resulted in the collapse of Argyle, leaving a major concrete supplier scrambling to pick up materials left behind at the abandoned Williamstown project.
A resident of an apartment built in Argyle told the creditors’ meeting that he has been unable to live there for the past year due to numerous defects.
He said he had gone to the Victorian Civil and Administrative Tribunal to try to rectify the errors as there was no insurance available for his property.
Another resident of the same complex asked if there was an opportunity to sue for negligent construction practices.
It seems the writing has been on the wall for months, with an anonymous Facebook user warning others against dealing with Argyle.
They posted in February that Argyle had only paid 25 percent of what was originally agreed “almost twelve months” earlier and had received “nothing” in the meantime.
The company’s president blamed a domino effect that saw other contractors go bankrupt, leaving him with more than $2 million in unpaid invoices. Pictured is a construction project in Argyle
Mr Juatowitch confirmed in a report to creditors that the company owes liens and accounts receivable, some of which may be subject to dispute as a result of defective works.
“In the lead-up to the appointment, the company has been subject to a number of legal proceedings, particularly in relation to the pursuit of accounts receivable amounts,” he wrote.
Initial investigations by the liquidator indicated that Mr 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 respect, should the company fail, the director may be exposed to an insolvent trading claim.’
A more detailed report on the case and whether the company has any recoverable assets or claims is expected to be released by the end of the year.