This article is from the Australian Property Journal archive
METRICON and Simonds Homes are among the companies deemed financially capable of delivering the nearly 1,800 unfinished homes left in limbo by the collapse of major builder Porter Davis.
However, a credit report by liquidators from insolvency firm Grant Thornton said the $71 million owed to unsecured creditors, mostly tradies, is unlikely to be recovered.
Porter Davis Homes collapsed at the end of March with 1,500 homes under construction in Victoria and about 200 in Queensland, owing $146.5 million to creditors, and was found to have not taken out domestic building insurance with the state’s Victorian Managed Insurance Authority (VMIA). A further 779 customers signed contracts and paid a deposit without building having started, and 410 people were made redundant.
The Victorian government is offering support for those who were left without insurance through no fault of their own in the form of a $15 million bailout package.
News.com.au is reporting that Commonwealth Bank is owed $32.9 million by Porter Davis, and a company called Chesapeake $24.6 million, while employees of the collapsed builder are owed $18 million in unpaid wages, leave and superannuation. Only the Commonwealth Bank is expected to get all its money back. Priority creditor Chesapeake and its employees will receive a “partial dividend”, while the remaining 1,000-plus unsecured creditors are “dividend unlikely”.
Meanwhile, an independent review by advisory firm KordaMentha has led to the appointment of companies including Metricon and Simonds to complete unfinished Porter Davis homes.
Victorian construction firm, Nostra Property Group, has already committed to finish building 375 townhouses that were left abandoned following the collapse.
“As Australia’s largest residential builder, we have been working with the VMIA to generate a large-scale industry solution,” said Brad Duggan, who is soon to become Metricon’s CEO.
“We are confident that we have a strong plan to deliver homes for ex-Porter Davis customers without impacting our existing Metricon customers.
“We are also pleased that the VMIA has great confidence in Metricon’s financial position and operational capacity following a detailed review process.”
Metricon faced a challenging year in 2022, with the passing of its founder and CEO Mario Biasin, and dealing with industry and media speculation about its future before it received a $30 million capital injection from its owners and support from the Commonwealth Bank.
The VMIA said in a statement that more than 1,100 claims decisions have been completed and $3 million paid out, while there have been about 1,350 site inspections conducted and it expects to close out “hundreds more claims assessments over coming weeks”.
It said the nearly 1,800 domestic insurance building claims that have come in from Porter Davis clients “marks the single biggest event of its kind in the almost three decades since VMIA’s formation as the Victorian government’s insurer”.
