UNSECURED local creditors of collapsed Kirways Constructions and its subsidiaries, including Cavalier Homes, could wait up to two years to see any of their money.
Liquidator Gess Rambaldi of Pitcher Partners told the Gippsland Times it was unlikely the liquidation process would be completed in less than two years.
“There is no specific time frame for liquidations under the Corporations Act, as each liquidation is different, but in my experience it is unlikely there will be a definitive conclusion in under two years, allowing for possible legal actions,” he said.
And the many local unsecured creditors of Kirways will not be first in line to claim any money recovered.
Mr Rambaldi said under the Corporations Act secured creditors such as the banks and employees had first call on the proceeds from any assets realised.
“In this instance we are led to believe that prior to the firm (Kirways Constructions) being placed in liquidation the employees were terminated and received their entitlements,” Mr Rimbaldi said.
He said the firm’s banks held mortgages and direct claims against specific assets, and that there may be other secured creditors with a hold on specific assets such as vehicles.
“In the event of there being a surplus, then that would be available for disbursement to unsecured creditors,” he said.
Mr Rimbaldi said he was in the process of calling for expressions of interest to take over a number of the construction projects Kirway had been involved in the hope of limiting any bank guarantees being called in and to realise any potential profit in the projects.
Kirways was involved in projects with total values of more than $36 million.
Creditors were called to a meeting at Pitcher Partners on Friday, with between 30 and 40 attending and many others represented by proxy.
Mr Rimbaldi said creditors would be kept informed of the progress of the liquidation process through the Committee of Inspection appointed at the meeting, the members of which have the ability to access information as needed.
He also indicated he would be available for briefing of creditors.
The extent of losses the local unsecured creditors may suffer is still unclear as Mr Rimbaldi explained no final figure on the amount owing was yet available.
He indicated more than $4million debts to unsecured creditors had been identified, with the possibility of more as creditors lodged further claims.
Pitcher Partners’ circular to creditors indicated more than $7million owed to all categories of creditors, including the Australian Tax Office.