Liquidators appointed to collapsed Victorian-based building firm Langford Jones Homes have advised more than 400 creditors that there are presently insufficient assets to pay any money to the more than $20 million in creditors.
RSM Australia Partners Jonathon Colbran and Richard Stone, who were appointed as Joint and Several Liquidators on 30 June, recently issued creditors an update on their investigations into the failed building firm.
“We advised creditors, that based on our initial assessment of the company’s assets, there is presently insufficient money to pay a dividend to creditors. Our investigations are ongoing and there are assets that still need to be recovered and realised but at this stage its not clear that there will be enough money to pay a dividend to creditors. This is obviously not the outcome anyone wants to see,’’ Mr Colbran said.
At the time Langford Jones Homes went into voluntary liquidation, 66 homes were under construction. These homes are predominantly located along the Bass Coast and within the communities of San Remo and Phillip Island. In addition, a further 60 projects had not commenced but paid deposits.
“While investigations into the final level of creditor claims is continuing, at this stage it appears that there are 354 ordinary unsecured creditors – including about 48 homeowners and more than 300 trade creditors, including suppliers and sub-contractors - allowed in excess of $12 million. In addition to these claims are loans that were made by members of the Langford-Jones family of $7 million which appear to have been used to support the business,’’ he said.
“Our investigations will consider a number of matters including the reasons for the Company’s failure, and whether any payments to third parties can be clawed back for the benefit of creditors.”
“We will also be investigating whether the directors allowed the company to trade whilst it was insolvent and whether they may have breached their director duties, which if found to be proven, may result in a personal liability of the directors for at least some of the losses suffered by creditors. Our findings from these investigations will also be reported to the Australian Securities and Investments Commission (ASIC).
The liquidators have been liaising with Langford Jones Homes staff, who were all made redundant, to assist them lodge claims under the Australian Government’s Fair Entitlement Guarantee (FEG) scheme.
“This scheme provides a safety net for the majority of employee entitlements and ensures that they are paid swiftly following the commencement of a liquidation which means they do not have to wait for recoveries to be made,’’ Mr Colbran said.
As part of their investigations, the liquidators have requested the books and records of a range of parties including external advisors, software providers, legal advisors, financial institutions and the Australian Taxation Office.
Mr Colbran and Mr Stone will prepare a report to creditors that will be issued before 30 September 2022 detailing the results of their investigations. A meeting of creditors will then be held in October 2022 to discuss the report, the status of the winding up and proposed next steps.