Creditors of ill-fated building company Kirway Constructions are realising there’s “slim chance” of remuneration, after the long drawn out liquidation process kicked off at a creditor meeting in Melbourne on Friday.
Attended by Kirway directors Ross Clavarino and Wayne Hough, and more than 20 companies, including sub-contractors and suppliers, creditors heard it would be at least six months before any clarity was reached on remuneration potential of at least $4 million owed to about 600 creditors.
Liquidator Gess Rambaldi of Pitcher Partners said efforts were already underway to obtain outstanding monies owed to Kirway, including a hundreds of thousands through maintenance contracts, and building contracts worth “in excess of a million”, however he said there were some legal circumstances in which parties were not legally required to pay.
Mr Rambaldi was unable to speculate on the prospect of any dividends for creditors, but said a bank involved as a secured creditor had priority claims on any assets recovered, ahead of unsecured contractor creditors.
Liz Filmer, of Filmer Landscaping in Sale, is owed $250,000 by Kirway, and said the overriding impression after the meeting was there would be little, if any, remuneration for contractor creditors.
“I guess we probably were a bit optimistic (beforehand); I had hoped there might have been something coming, but that looks unlikely now,” Ms Filmer said.
She said the $250,000 was owed from the past three months of work at the yet to be completed Dalkeith Retirement Village project in Traralgon, with the last month of work representing “their biggest month on record”.
She said she would now have to increase loan overdraft to pay company wages.
“That’s quite a hit, and it’s hard to take; but we’ve got to just move on and try and get us out of this hole, but in the current climate, everything’s so tight – there’s not going to be a lot of jobs so it will be hard to recoup,” Ms Filmer said.
“There was a little bit of bitterness in the room (on Friday); I think we are all just a little depressed.”
Mr Rambaldi said creditors “made their sentiments felt” at the meeting, and a “few people expressed frustrations about why they didn’t see the insolvency coming”.
“Clearly there’s people who are hurting over this; some creditors actually said so – it was quite a difficult process for a number of people to go through,” Mr Rambaldi said.
He said finding project builders to complete the existing eight commercial and 15 residential projects across its construction and home building franchises in Gippsland and Warrnambool was currently of highest priority, a tender process for which expressions of interest is due to end on Wednesday.
“We’ve learnt a few lessons from this, and will not let our money owing drag out in future, no matter what,” Ms Filmer said.
