ONE of the Hunter’s best-known homegrown builders, Martin Building Services, has folded with debts of almost $10 million.
The company, which began in Maitland almost 20 years ago, was placed in the hands of insolvency experts in December at the request of director and owner Denis Martin.
James Shaw, a partner of Shaw Gidley Insolvency Reconstruction, was appointed liquidator on December 14.
Mr Shaw said early investigations indicated employees would be paid and the remaining assets would go to the company’s banker, which has security over its assets.
“It is unlikely that there will be anything for creditors,” he said.
Australian Securities and Investment Commission (ASIC) documents reveal the company has unsecured debts of $4.9 million and owes $4.2 million to the bank.
Assets total $3.9 million, including land, debtors and other money owed to the company.
The shortfall is estimated to be $5.5 million, of which almost $1 million is owed to Mr Martin and more than $2 million is owed to companies or people related to Martin Building Services.
A creditor, who asked not to be named, said there were a “host of small Hunter businesses” who would be badly hurt in the collapse.
“It was a good locally owned and grown company that always paid on time, but the flow-on effect from this will be difficult for the little husband-and-wife creditors to carry,” he said.
The largest unsecured subcontractor debt is $402,255 owed to HD Projects in Sydney, followed by $220,197 owed to Hunter-based Jeffkins Group and $211,365 owed to a Newcastle concreter.
Mr Martin described the liquidation as “beyond” a difficult choice, but said it was the best way to limit the impact on others.
“Liquidation gave us the chance to pay a larger portion of what we owed than if Martin Building Services had attempted to trade on,” he said.
“Even if just another dollar goes to the people we have worked with for the past 20 years, it was the best option we had for them.”
Martin Building Services, based at Rutherford, offered commercial and residential construction.
Master Builders Newcastle president Matthew Haines said the collapse would hit smaller subcontractors hard.
Mr Haines said it was another example of the Security of Payment Act, designed to protect subcontractors and ensure prompt payment for services, not working.
“The system clearly doesn’t work," he said. “We see this type of thing happen too often where in the end people are not paid for work they have done. Things need to change.”
Despite being aware of several building firm collapses in the past few months, Mr Haines said the Hunter industry was “very strong”.
Martin Project Homes continues to trade.