Troubled builder Modco Residential is facing a court action lodged by a recruitment firm seeking to wind-up the company.
Troubled builder Modco Residential is facing a court action lodged by a recruitment firm seeking to wind-up the company.
Last week, a notification of court action relating to winding up a company was lodged with the Australian Securities and Investments Commission against Modco, a building company founded by Perth couple Yusuf Khan and Cynthia Lu in the midst of the pandemic.
Recruitment and labour hire services company Torquejobs, which has an office in Kewdale and locations in Brisbane and Melbourne, lodged the court action from Queensland and is being represented by HWL Ebsworth in Brisbane.
Torquejobs is believed to be owed money by Modco, and both companies have been contacted by Business News for comment.
The matter is due to be heard before a judge on July 18.
The court action falls under the Corporations Act and usually involves an unpaid creditor making an application to the court for orders to wind up a company in insolvency.
If the company in question fails to comply with a statutory demand- which is a creditor’s formal written request requiring a company to pay a debt within the statutory period - the company is presumed insolvent under the Corporations Act.
The court action bid comes after the state’s building industry regulator cautioned customers, subcontractors and suppliers over Modco’s ability to pay its debts.
Last month, Building and Energy WA said it had received information from several owners, subcontractors and suppliers leading to growing concerns about the builder’s capacity to pay its debts.
The industry watchdog had also received reports that in some cases, no work was taking place and that progress payments were being demanded in advance of being due.
Building and Energy said it has made several attempts to communicate with Modco’s director and nominated supervisor to gain an understanding of the company’s financial position but neither had been responsive.
