More than 150 unsecured creditors of former senator Bob Day’s failed building company in South Australia will not be paid the millions of dollars they are owed.
These 157 creditors are owed $4.9 million by Homestead Homes and they include subcontractors as well as customers who paid deposits on homes that remain unfinished.
“It owes people in this room and people that might not be here today about $4.9 million,” liquidator Matthew Caddy told a creditors’ meeting in Adelaide on Friday.
“It is almost certain that there will be no money available for insecure creditors. It will essentially be a bad debt.”
Mr Day owned the failed building group Home Australia, which had individual businesses in SA, NSW, Victoria, WA and Queensland.
The liquidator was blunt in his appraisal of the former Family First senator’s management of the company since he entered politics in 2013.
“When Mr Day became a senator he didn’t put a management team in place to actually run the businesses,” Mr Caddy said.
“They were left to run themselves.”
He said money was moved freely between the separate enterprises but they were being run without cohesion.
“There was limited integration of the businesses. They were operating within their own silos.”
There are 300 unsecured creditors across the Home Australia group who are owed about $11 million they will never receive.
Mr Caddy said the group lost $12 million in the final three years before it was declared insolvent.
It went from banking a profit in 2013 to losing $2.2 million in 2014, $4.9 million in 2015 and at least $5 million in 2016.
When Mr Day finally called in the liquidators the companies had no cash left.
“They had to cease construction of any homes immediately,” the liquidator said.
“They had no money to pay tradesmen.”
Among a number of resolutions on Friday, creditors voted against destroying the financial records of Homestead Homes within six months, despite the cost of storing them for longer.
Some felt uncomfortable destroying records given the significance of the insolvency, while others were worried it could leave questions unanswered.
“This is part of Australian history as well, given a senator has just resigned,” one man said.
Husband and wife Tony and Lina Calvanese, who own a waterproofing business, said they were $15,000 out of pocket.
Mr Calvanese said he has worked with Mr Day for 24 years but hadn’t spoken to him since the collapse.
“I know his family, his wife,” he said.
“He hasn’t been doing the right thing lately. It’s not fair.”
Mrs Calvanese said their business would struggle but survive.
“We’ll be right. We just won’t eat for a few days,” she said.
Mr Day did not attend Friday’s meeting.