Unsecured creditors of construction company York Civil are unlikely to see any returns from the business, with creditors voting unanimously to liquidate the company at its second creditors’ meeting, according to a report by ABC News.
In a report to creditors, the company’s administration, Martin Lewis and Timothy Mableson from accounting firm Ferrier Hodgson blamed York Civil’s failure on a number of joint venture projects, which placed a strain on the company’s financial position and time of senior management.
The joint projects in question included Adelaide’s Torrens to Torrens road upgrade, East Link tram extension, and Perth’s Swan River pedestrian bridge.
Employee creditors may be able to recover their outstanding entitlements under the Federal government’s entitlement safety net, the Fair Entitlements Guarantee.
The administrators estimated the company has $43.6 million in liabilities but holds just $7.8 million in assets. The liabilities include $7.9 million in employee claims and $15.9 million owed to unsecured creditors.
The administrators’ report shows that prior to that date, the company was actively negotiating with two ASX-listed entities regarding the potential sale of the company’s business and assets. But no sale happened.
The administrators said the company recorded trading losses of $14.6 million for last financial year, forcing a reduction in the company’s net assets from $21.2 million to $6.5 million in a year.
The company’s cash position had deteriorated from $5 million cash on hand to an overdraft of $10 million in a little over two years. York Civil is also in dispute with a major client over an $11 million debt.