The debts of a collapsed building company have exploded to nearly double initial estimates as administrators look more closely into its financial affairs.
News.com.au reported last month that NSW and ACT builder Cubitt’s Granny Flats and Home Extensions had appointed administrators.
Richard Stone and Brett Lord from insolvency firm RSM Australia Partners took over the business, pausing all construction work, standing down most of the company’s 80 staff and launching an urgent sales campaign.
In a statement at the time, an RSM spokesperson said initial estimates put the company’s debt at $3.8 million.
But as of Friday morning, that number has risen massively. An RSM spokesperson said it now appears Cubitt’s owes $6.8 million to 373 creditors.
“Our investigations are ongoing, however, to date we have identified more than $1 million in assets and about $6.8 million in liabilities,’’ Mr Stone said. said.
The collapse of Cubitt’s plunged the fate of 120 projects into jeopardy as well as 80 staff members.
But it’s not all bad news. So far, there’s been high levels of interest in buying up the business.
The administrators noted that they had received 38 expressions of interest from parties looking to buy Cubitt’s.
“We advertised the sale of the business within three days of being appointed to take control of Cubitt’s,” Mr Stone said.
“The sale includes more than 100 housing contracts that were either underway or ready to start (at the time of the Administrators’ appointment); four showrooms located in Sydney, Newcastle, Wollongong and Canberra; vehicles and equipment; and the business name.”
Cubitt’s has four display homes in Sydney, Newcastle, Wollongong and Canberra, which have been locked up.
The administrators also said they were taking steps to secure other assets which they have identified to be worth $1.5 million.
Do you know more or have a similar story? Get in touch | alex.turner-cohen@news.com.au
News.com.au previously reported on a customer who was left absolutely floored to learn of the collapse of Cubitt’s, as just 12 days earlier they had forked out a $23,000 deposit.
Vince*, who did not want to share his last name, and his wife Katherine, 49, were toying with the idea of building a granny flat in their backyard as another stream of income.
After months of umming and ahhing and back and forth with their preferred builder, Cubitt’s, the Sydney couple finally transferred a $23,000 deposit to the business.
But less than two weeks later, the business went under.
Vince, a dad-of-three, has now been left wondering how the business was able to take his money at such a late stage if the company had known it was in financial strife.
“It came as a shock,” he told news.com.au. Based on his interactions with staff, it appears to have been a surprise to them, too.
Vince said he only found out about the collapse of Cubitt’s because site surveyors were supposed to visit his backyard this Tuesday, the same day the builder went into external administration.
The surveyors called him before they arrived asking if he’d be willing to pay them directly.
When he asked why, they said it was because Cubitt’s had gone under.
“We looked at their display homes, we were excited, we were trying to provide a future for our kids,” he said. “Now we’re just hit with this.”
Of the 120 building sites impacted by the builder going bust, 60 are at various stages of completion.
There are 49 sites in NSW and 11 in the Canberra area.
A further 60 are either in pre-construction or have been completed and are awaiting final payments.
In 1994, the eponymous Ian Cubitt launched the business and said he had trained 120 carpenters between then and now.
Cubitt’s said it was unable to continue because of the economic downturn flattening builders across the country.
“Due to bank lending conditions, supply prices, taxation changes, insurance prices, Covid recovery and lengthy weather events, Cubitt’s company has suffered more than it can shoulder,” the company said.
Cubitt’s said it had tried to “honour fixed price contracts” in 2021 and the owners, Ian Cubitt, Kim Cubitt and Kate Cubitt, tried to complete builds by financing it through their own personal money.
They called the company’s collapse a “devastating decision” and said the meeting where they informed staff was “very emotional”.
The administrators said the Cubitt family was assisting with their inquiries.
alex.turner-cohen@news.com.au
