By CAM LUCADOU-WELLS
Collapsed boutique builder Botanic Homes had been trading insolvent for several months before going into voluntary administration in early May, its appointed administrator has said.
PKF Melbourne administrator Jason Stone said the Hallam company, which owes up to $5 million to 250 creditors including customers and tradies, was likely to be liquidated in coming months.
A meeting to decide Botanic Homes’ future has been postponed until 31 August while works on some unfinished homes is completed.
Mr Stone said PKF, under Botanic Homes’ builders registration, has offered to complete 12 near-finished homes.
Three customers declined the offer.
About 48 customers, including seven who had paid deposits to Botanic Homes and building had not started, were making claims to state insurer Victorian Managed Insurance Authority.
During liquidation, priority would be given to secured creditors, such as banks, employees as well as several suppliers who had security over Botanic Homes’ property.
Unsecured creditors such as unpaid tradies – one who has told Star News he is owed about $200,000 – are further down the list.
Mr Stone said Botanic Homes directors Robert Bender and Craig Garvey were among the listed creditors.
The pair had claimed unsecured loans they contributed to “some working capital difficulties”.
“They are listed down as a creditor but we wouldn’t be able to assess their claim until such time as I was in a position to pay unsecured creditors,” Mr Stone said.
The directors’ claim could be used to offset any prosecution for insolvent trading debts against them, Mr Stone said.
“We do believe there was some trading insolvent but it’s difficult to prove.
“From what we have in our possession, the records we have reviewed… it appears the company has been insolvent in the last few months leading up to the appointment and there is a claim of insolvent trading,” he said.
The onus was on Mr Bender and Mr Garvey to prove justifiable defences, such as attempting to have a third party acquire or buy a substantial stake in the business.
As liquidators, PKF could prosecute the directors to claim any new debts incurred while trading insolvent.
The question was whether it was “commercially viable” to seek the monies from the directors.
Both directors held properties but Mr Stone expected there were “substantial claims” against the assets by lenders and secured suppliers – some who have lodged caveats over the property.
“We have to assess if we’ll be throwing good money after bad.”
