Liquidation of collapsed developer Privium could ‘recover’ money for hundreds of creditors

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Directors of collapsed Queensland real estate developer Privium Group have recommended its liquidation, after finding that the construction group likely became insolvent between August and November.

FTI Consulting released a report on Tuesday detailing the directors’ conclusions on the transactions made by the group, when it became insolvent and the return secured and unsecured creditors can expect to receive.

The directors’ “preliminary view” is that the Privium companies were likely insolvent from at least August until the time of their appointment in mid-November.

“Based on the estimated date of insolvency and our current understanding of corporate financial affairs, the potential insolvent business claim could be in the range of approximately $ 2.5 million,” the report said.

According to the directors, however, it is not clear whether the director and the former directors could face an insolvent business claim, which is an action for breach of a director’s duty to prevent insolvent trading of. happen.

Prior to its collapse, Privium Group operated as the parent company of eight other entities, including Privium Pty – formerly known as Privium Homes – which was a real estate developer operating in Queensland, NSW and Victoria.

The directors discovered that Privium Pty has total liabilities of $ 24.6 million and estimated that secured creditors could receive the highest possible return of 5 cents on the dollar within six to 12 months. The administrators do not expect any return for unsecured creditors.

According to the report, the liquidation of Privium Group and its eight companies could result in the recovery of property or money for creditors, which is why they recommend the liquidation of the group.

The report follows the appointment of directors John Park, Joanne Dunn and Kelly-Anne Trenfield on November 17 who will hold a second creditors’ meeting on December 22.

More than 2,000 retail home buyers across Queensland, Victoria and NSW were affected by the Privium collapse last month, along with hundreds of suppliers, contractors and subcontractors.

Privium Group director Robert Harder said the company had collapsed due to the effects of COVID-19 on operations, which blew up delays in the industry and resulted in restrictions on construction sites. construction in Victoria.

Directors agreed with the director’s take on why the group collapsed, adding that construction costs outpaced revenue growth.

They said the higher costs were linked to increased input prices and labor costs, influenced by a shortage of skilled labor and global supply chain issues.

SmartCompany contacted FTI Consulting administrators who declined to comment further.


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