Failed building business Modco Residential’s glamorous co-founder Cynthia Lu is claiming she is owed $2.5 million from the collapsed residential building company.
Failed building business Modco Residential’s glamorous co-founder Cynthia Lu is claiming she is owed $2.5 million from the collapsed company with up to 50 creditors stacked against it.
Business News can reveal the co-founder, through her business entity Ms Lu Holdings, is claiming she’s owed $2.5 million as a secured creditor.
The details were revealed in a report on the company’s activities and property from the administrator lodged with the Australian Securities and Investment Commission today.
Modco was founded by husband and wife Yusuf Khan and Cynthia Lu during the pandemic and has been hit with a string of accusations about its ability to settle its debts in the past six months.
Today’s update comes after minutes from a creditors meeting earlier this month revealed that Modco could allegedly owe about $5 million to up to 50 creditors.
One creditor who has worked with Modco, Riviera Homes WA, alleged it's owed $1.75 million from the company, according to the minutes.
Another creditor, Lam Property Development Group, claimed it's owed $1 million from the Osborne Park-based builder.
But both major creditors’ claims were subject to debate as the administrators were in doubt as to whether the debts should be admitted or rejected.
In the same meeting, it was noted that the builder’s co-founder Ms Lu, through her business entity Ms Lu Holdings, expressed interest in reviving the failed business after putting forward a deed of company arrangement.
The details of the DOCA have not yet been revealed.
But Modco is yet to face court over a winding-up application made by alleged unpaid creditor Torquejobs which claims it's owed $28,112 from three unpaid invoices.
The court date is scheduled for later this month, which may hinder Ms Lu’s plan to revive the failed business given her bid would need approval from the creditors.
Other creditors present at the meeting on August 3 claimed they were allegedly owed amounts ranging from about $10,000 and $348,700, with the latter alleged by the Australian Taxation Office.
Namely, Easy Access Scaffolding was claiming it was owed $89,000, Pratt Plumbers alleged it's owed $37,500 and Fost3r Carpentry was claiming $21,000 in alleged unpaid debts from Modco.
Modco ceased trading in May and had just $300,000 in assets and its account was overdrawn by $900 at the time of GTS Advisory’s Mathieu Tribut appointment as administrator in July.
At the same time, it appeared Modco had 18 ongoing building projects, the minutes revealed.
Modco cut its staff from 33 employees in the 2022 financial year to only a single staff member in FY23.
