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Every creditor of former senator Bob Day’s home building group except National Australia Bank is likely to come away with nothing, liquidators say.

Liquidators for the Home Australia group met with creditors in Sydney and Melbourne on Thursday.

"The information available to us suggests unsecured creditors will not receive any money," McGrathNicol's Matt Caddy said in Melbourne.

The creditors for Huxley Homes, the NSW arm of the group, were told it had $150 in the bank and the group owed $19 million.

The Sydney meeting was told all employees had been made redundant and selling the whole business would not recoup costs.

The only secured creditor is National Australia Bank, which liquidator McGrathNicol's records show is owed $11.44 million.

More than 200 customers across all the arms of the group have been left with unfinished homes in the wake of the collapse.

Mr Day quit his role as a Family First senator for South Australia on Tuesday in order to deal with the fallout from the company liquidation.

He had intended to stay on in parliament if a major investor's offer for the whole group went ahead, but the third-party bid was withdrawn.

The meetings were told investigators were looking at allegations of insolvent trading, breaches of directors' duties, unfair preferences and uncommercial transactions.

Any evidence of offences would be referred to the Australian Securities and Investments Commission.

The liquidators said the causes of the company failure appeared to be significant trading losses and cash flow issues as well as construction disputes.

As well, houses were being sold at less than what they cost to build.

One Huxley customer told AAP he was "shocked and confused" and had not received any resolution from the meeting on Thursday.

Mr Day faces a further challenge as the Senate considers referring his election to the High Court.

The government wants the court decide whether Mr Day was eligible to run for parliament given that he may have directly or indirectly benefited from the commonwealth through a lease arrangement relating to his Adelaide electoral office.

Such a benefit disqualifies a person under the constitution from running for parliament.

Meanwhile, another businessman-turned-senator was due to face a creditors' meeting in Perth.

One Nation senator Rod Culleton's company Elite Grains is believed to owe dozens of creditors more than $6 million.

Before the meeting, Senator Culleton became angry when he saw a reporter with a camera, which he tried to take from the journalist but was restrained by his chief of staff Margaret Menzel.

 
  • Unfortunately the law in Australia pertaining to insolvency does not protect the supplier. In the case of Bob Days building company the suppliers include the customers, Families who are paying to get their homes built. The irony is that many of these "unsecured creditors" will have borrowed from a bank. Note the National Bank is the main secured creditor. The bank will get first bite of the cherry then the employees then the Tax Department but along the way the liquidator will always be paid. The tradespeople the raw materials suppliers and the people who have funded the business the home owners will all miss out. This is very strange as the bank "the secured creditor" would have been fully aware of the precarious state of Bob Days business and yet because it is a secured creditor it will be first in line. The solution would be for people who are having a home built for them by a builder would be to obtain a directors gaurantee from the builder and also become a secured creditor so as in the event of a collapse they could stand in line with the banks.

  • It will depend on the date that Day was deemed to be trading insolvent , when NAB made recoveries and most importantly if NAB knew Day was trading insolvent. " Knowing Assistance – Knowing Receipt"

  • Now I can see clearly why no one in Government would step up when Defence contract at Nowra went pear shaped.
    Hewatt went into voluntary administration with out come 290 unsecured creditors lost 33 million.
    Give the news of mention senators it was a waste of time turning to the government for a change to contracting laws and responsibilities.
    Defence neatly did a side step claiming work contracted out so not their problem.

  • This is more than disturbing Anh and this case raises many issues of concern. First, the fact that the company may have been trading insolvent. How did it come to be that Huxley Homes has $150.00 in the bank, but owed $9 Million? If it turns out that the company was trading insolvent, and it is too often the circumstance, then the question is: "Where was the regulator, and why are so many officials employed to be permanently off duty?" We hear this matter will be referred to ASIC! But where was ASIC prior to this story being made public? What is patently clear is that the putative business regulator, like most of the other 'regulators', does not do any 'regulating'! Second, the likelihood that the NAB as a secured creditor will be the only one to receive any money highlights who holds all the power, and underscores the powerlessness and vulnerability of all the little people – the 207 owners left in limbo and the large number of subcontractors owed money. They are the major stakeholders. The former supplies all the money to prop up the business of building and the latter provides all the products, materials and labour. But it is they who take the fall, and only they whose lives will be damaged. The question here is: "How did the system become structured, so distorted and so utterly unfair that consumers and the small creditors in this insolvency case are the only ones seriously harmed?" As the number one stakeholders in this case, just as in the huge numbers of construction company insolvencies annually, owners and subbies will bear the brunt of decisions made by others, this caused by Government's total lack of 'regulating'. How is it that the two key groups became locked out, voiceless and designated to be the victims?

  • I must say that I am inclined to agree with your analysis, Anne.

    It seems that only the big banks have the power to demand securitisation. It is the smaller lenders, such as the subcontractors, suppliers and consumers who forward deposits who do not have the power to demand securitisation who are left holding the can. I don't know how you protect smaller creditors, but it must be done.

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