According to ASIC insolvency data, there were 2,975 building companies that entered external administration in 2023-24, representing some 27% of all insolvencies.
The collapse of Porter Davis on 31 March 2023, left some 1,700 homeowners across Queensland and Victoria having to deal with the fallout.
These are extremely sobering figures. The reality for homeowners is that they are often left dealing with liquidators without many options and faced with substantial losses.
What can you do if you suspect your builder is facing financial difficulty?
The Federal Court of Australia recently handed down a landmark judgment against a third party adviser for devising an asset-stripping scheme and breaching the creditor-defeating disposition provisions of the Corporations Act 2001 (Cth).
Chris Pearce, Blackwall Legal LLP
This is an extract from the 2025 edition of GRR's The Asia-Pacific Restructuring Review. The whole publication is available here.
This is an Insight article, written by a selected partner as part of GRR's co-published content. Read more on Insight
In summary
The Supreme Court of NSW refused to validate the appointment of a voluntary administrator (Administrator) to Premier Energy Resources Pty Ltd (Company) under section 447A of the Corporations Act 2001 (Cth) (Act) after the Administrator failed to investigate allegations of fraud surrounding his appointment.
Introduction
Despites its recent failure in case against an administrator in a phoenixing case, ASIC could snatch long-term victory from the jaws of defeat with clear regulatory guidance for insolvency practitioners.
In the realm of corporate governance, addressing misconduct within a company becomes particularly critical when an insolvency practitioner is appointed. The Australian Securities and Investments Commission (ASIC) sheds light on the intricacies of this scenario, outlining key points for stakeholders to be aware of and steps to take.
On 14 September 2023, the Australian Securities and Investments Commission (ASIC) released Consultation Paper 372 "Guidance on insolvent trading safe harbour provisions: Update to RG 217".
The Western Australia Court of Appeal has provided clarity concerning insolvency practitioner independence following pre-administration services and whether those pre-administration services can disentitle insolvency practitioners to remuneration.
In the matter of Premier Energy Resources Pty Ltd [2023] NSWSC 1185, the Administrator unsuccessfully sought an order validating his appointment where he failed to investigate allegations that his appointment documents included a director’s forged letter of resignation.
Key takeaways