As widely reported in the media, the Probuild group of companies have on 23 February 2022 appointed voluntary administrators from Deloitte following claims that Probuild’s parent company has withdrawn financial support.

Given Probuild’s position as one of Australia’s largest builders, and reports of $5 billion of unfinished projects around Australia, it is likely that there will be a very large number of creditors who are owed money and face a great deal of uncertainty about whether they will be paid.

Affected creditors are likely to include lenders, suppliers of materials and equipment to sites, contractors to Probuild and sub-contractors to those contractors (who reportedly perform 90% of all work on sites), employees as well as other stakeholders who have entered into agreements with Probuild.

While the administrators will be looking at ways to save the business, affected creditors are advised to be proactive and act quickly to protect their interests.

While the steps that each creditor can take will depend on their particular situation, creditor suppliers should now ask themselves the following questions:

• What is the debt owed as at the date of administration?
• Who owes you the debt?
• Are there guarantors of that debt that are not in administration?
• Have you notified your insurer?
• Do you have security for the debt? If so:
  • What is the security interest?
  • Who has control of the interest?
  • Have you perfected your security interests through registration under the PPSA?
  • Is your PPSA registration accurate?
  • What is your PPSA priority status?
  • Can you collect your equipment and supplies from its current location?
  • What are you owed if the administrators wish to use the equipment and supplies in a trade on?
• Contractors: Are there potential claims against you under security for payments legislation?
• Subcontractors: Do you have a claim against a contractor under security of payments legislation?

Turks is one of Australia’s leading law firms representing creditors affected by insolvencies and have been involved in most of the high profile insolvent administrations in recent times. Turks have published the following articles on the security of payments legislation and the PPSR:

TurkAlert - Building Industry Security of Payment in 2020

TurkAlert - Owner recovers its gold from the valley despite failing to register on the PPSR

TurkAlert - Major PPSA decision in the WA Court of Appeal

If you would like some legal assistance to protect your interests please do not hesitate to contact one of our experts for an obligation free discussion.