A 23-YEAR-OLD tradesman has amassed almost $3million in debts – including at least $650,000 to his family – and left scores of small Hunter businesses out of pocket.
Jacob Murphy, director of electrical services company Custom Electrics and Automation Pty Ltd, is the grandson of respected businessman Gerard Murphy, founder of well-known firm Murphy Plumbing, which services Newcastle and the Hunter.
Custom Electrics and Automation Pty Ltd is being wound up and a creditors’ report prepared by liquidator Lawler Partners, and obtained by the Newcastle Herald, shows that 18 secured creditors are owed a total of at least $1.355million.
Among the secured creditors are Gerard Murphy (owed $350,000), Jacob’s parents Andrew and Michele ($300,000) and the National Australia Bank ($50,854.87).
Hunter businesses comprise 51 of the 89 unsecured trade creditors collectively owed at least $1.472million, with the Australian Tax Office also owed $295,076.
Trudy-Lee Hickey, who with Lawler Partners’ colleague John Vouris has been appointed joint and several liquidator of the company, said a creditors meeting today would examine details of the initial report.
She said preliminary investigations revealed Jacob Murphy’s company had assets of about $75,000 and it was thus unlikely that unsecured creditors would be repaid.
‘‘Any payments to priority creditors or secured creditors will depend on asset recoveries and confirming validity of secured charges,’’ she added.
About $108,000 in employee entitlements is owed to 46 staff, with their superannuation a priority under the Corporations Act but not covered by the federal government’s Fair Entitlements Guarantee scheme.
‘‘We are doing a full investigation and we will report our findings to ASIC and creditors, ASIC may wish to fund further investigations if we recommend them and creditors will be offered the same opportunity if they wish to do so,’’ Ms Hickey said. Jacob Murphy declined to comment when contacted by the Herald yesterday.
A spokeswoman for Murphy Plumbing said the family would not be commenting on the matter.
None of the creditors contacted by the Herald yesterday wished to be named, however they said jobs they had worked on with Jacob Murphy’s company included the building of the Newcastle Institute for Energy and Resources at the University of Newcastle and the refurbishment of Maitland Hospital.
One of the creditors said most businesses affected were wondering how a 23-year-old man could apparently fall behind so quickly.
‘‘Everyone overall is saying how can someone so young amass so much debt so quickly ... and where has the money gone?’’ he said.
‘‘You extend people credit and you hope that they pay within terms within 30 days ... but it’s the building industry, and no one does.’’