Supply chain disruptions and price escalations were factors contributing to the collapse of builder Collier Homes, whose director had injected substantial personal funds into the business.
Supply chain disruptions and price escalations were factors contributing to the collapse of builder Collier Homes, whose director had injected substantial personal funds into the business.
The residential builder, one of the oldest in the Western Australian industry, appointed liquidators from McGrathNicol to wind-up its remaining operations in April.
At the time, it was understood the builder had only a handful of homes still under construction, and one employee on the books.
The liquidator’s latest report reveals the builder’s sole director, Dario Amara, stopped taking on new projects about 18 months prior to the liquidators’ appointment
He also injected “substantial personal funds” into the operation with a view to finalising all of the remaining projects, according to the report.
But with no further funding available, Mr Amara took steps to cease operations and appoint McGrathNicol liquidators Rob Brauer and Linda Smith.
The Perth building company, which had been operating for 60 years under the brand name, had applied for an interest-free loan under the Builders Support Loan Facility but was unsuccessful.
The state government support measure, introduced in January, is an interest-free loan facility to help eligible residential builders complete unfinished properties.
The latest report also shed light on the circumstances that led to Collier’s collapse, citing that its financial position was affected by COVID-19-induced broad economic factors on the building and construction industry.
Supply chain disruptions, price escalation and uncertainity and subcontractor delays were all listed as impacts by the company's director, according to the report.
The business operated under an uncommon structure. Mr Amara executed the building contracts in a personal capacity, using Collier Homes branding.
The company in liquidation, Collier Home (1959), was not a contracted builder, and all building activity was undertaken by Mr Amara in his personal capacity, the report read.
Collier Homes instead provided administrative support services to the director.
As a result, and through the way the business was purchased in 2016, the liquidators said the ownership of the assets and the legal responsibility for the debts incurred in connection with the building projects was uncertain.
Mr Amara, an experienced Perth business executive and second-generation builder, bought Collier Homes out of liquidation back in 2016.
The majority of Collier’s debts were tied to related party entities, being the cash injections the company was reliant on to continue operation.
About a month after liquidators took control of the business, a trustee was appointed to Mr Amara’s estate under the Bankruptcy Act 1966.
Liquidators will continue to complete their investigations on the company’s affairs ahead of finalising the process within the next six to 12 months.
