Creditors of $1.7m builder collapse ‘unlikely’ to see a cent
A company that once billed itself as Brisbane's premier home extension and renovation business may have been trading insolvent for up to a year before going into liquidation with creditors unlikely to see any of their money, according to liquidators.
Total Lifestyle Builders Pty Ltd which went into liquidation in June this year owing more than $1.7m to 89 unsecured creditors as well as the ATO.
Liquidators Hall Chadwick's Ginette Muller and Marcus Watters said in a report lodged with ASIC that in their view the company "may have been insolvent or likely to become insolvent from at least July 2019".
They said Total Lifestyle Builders started to incur regular monthly net losses from as far back as August 2018 but still recorded an overall profit for the year ended June 20, 2019.
However, the company made less profit and larger losses afterwards leading to an overall loss in the period up to June 18, 2020.
In the ASIC report the liquidators said a dividend was "unlikely" to be paid to any creditor and that they write off any debt owed by the company.
The company's sole director Allan Ernest Stroud, and his wife Dian Patricia Stroud hold all the shares in Total Lifestyle Builders which was registered in 2004. No action has been taken by ASIC against any individual.
According to the ASIC report Mr Stroud said there were a number of reasons for the company's failure, including having rectification works on a job costing $200,000 and his health issues.
He said other issues were in his absence the company took on uncommercial projects and quoted on projects that were well below a margin of 25 per cent, resources were used to fund an employee's own projects, poor bookkeeping and being forced into hibernation because of COVID-19.
The Courier-Mail has attempted to contact Mr Stroud for comment.
Total Lifestyle Builders, previously known as Lifestyle Kit Homes, was primarily known for construction of granny flats. Mr Stroud advised that the company ceased to trade in April 2020.
A search by the liquidators found Mr Stroud owed no property. However, his wife Dian Stroud owned a house in Milton, that was sold in March/April for $1.065 million and a commercial property in Chermside which was the business' headquarters.
According to CoreLogic the Chermside property was in both names and transferred to Dian Stroud in April this year for $77,700. The property was later sold on May 20 for $612,333.
Mr Stroud told the liquidators that money was used to pay the mortgages on both properties, the company's bank overdraft and creditors.
Originally published as Creditors of $1.7m builder collapse 'unlikely' to see a cent