By CAM LUCADOU-WELLS
THE administrator of collapsed builder Botanic Homes says a decision on whether to report Botanic’s directors for possible insolvent trading is imminent.
Botanic Homes met with administrators nearly four weeks prior to it going into voluntary receivership on 3 May, while at the same time appearing to hire still-unpaid tradie-contractors.
Botanic Homes owes up to $5 million to 250 creditors including customers and tradies. One tradie told Star News he was owed $200,000 and had been assured of the company’s financial viability up to the day it folded.
He held little hope of recovering the debt.
Administrator Jason Stone of PKF Melbourne said an “in-depth investigation” of the directors Robert Bender and Craig Garvey’s conduct would likely occur after the Hallam company’s future was decided by the end of August.
He said a report would be prepared for corporate regulator the Australian Securities and Investments Commission on whether the directors’ conduct was “appropriate”.
In June, Mr Stone told Star News that PKF believed the directors were trading insolvent but “it’s difficult to prove”.
Under law, PKF must report the directors if there’s a suspicion of any offences, such as insolvent trading.
PKF can also prosecute the directors to claim any new debts incurred while trading insolvent.
Mr Stone said directors Mr Garvey and Mr Bender were among the listed creditors, claiming unsecured loans they contributed to alleviate “some working capital difficulties”.
The directors’ claim could be used to offset any prosecution for insolvent trading debts against them, Mr Stone said.
Meanwhile, customers who are left with partly or completely unbuilt Botanic Home houses say they are frustrated by delays and extra costs as they chase insurers and PKF.
State insurer Victoria Managed Insurance Agency covers up to 20 per cent of the builders’ contract price for incomplete works.
As of policies issued after 1 July 2014, there’s a cap of $300,000 for VMIA builders insurance claims.
One customer said she and her partner opted to sell the land after being unable to recover their deposit from insurers. The couple had paid a deposit for Botanic Homes’ works that started in March.
She said she was annoyed that despite the builder’s financial woes it still “took our hefty deposit and continued on business as usual”.
VMIA spokesman Ken Thornton said VMIA domestic insurance covered the loss of deposit only where building works had not started.
He said almost half of the 68 Botanic homeowners who had filed claims had accepted the state insurer’s offer.
“In most cases, payment is made to a contractor to complete the works.
“The claims paid to date have been a combination of refunding deposit monies where the builder did not commence works on site, and in some cases payment direct to home owners to complete their home.”
