Failed builder's work passed on

Central Systems will acquire all of the work in progress of failed home builders Freelife and Visionaire Homes as part of a deal brokered by administrator Deloitte Restructuring Services.

Centrals provide construction and maintenance services across Australia at all stages of project life and is part of the ASX-listed Resource Development Group.

Deloitte Restructuring Services partner Jason Tracy said the acquisition by Centrals followed an expressions of interest process.

“We sought expressions of interest to purchase the work in progress contracts and associated records," he said.

"The capability and capacity to deliver on the works for a number of parties was then evaluated, as well as the ability to re-contract with homebuyers and subcontractors, before the agreement with Centrals was reached."

Mr Tracy said the agreement would maximise the value realised for the work in progress and would reduce the overall creditor pool.

“Centrals also have a home indemnity insurance policy with QBE and the administrators will be working with QBE and Centrals to ensure the timely resumption of construction of homes,” he said.

Capital Works Construction, trading as Freelife and Visionaire Homes, is likely to be put into liquidation, but creditors have been warned to expect no returns.

Deloitte in a report said the company behind the the Freelife and Visionaire brands had likely been trading while insolvent since mid-2014.

Capital Works Constructions was put into administration last month owing an estimated $8.5 million. It had 229 dwellings under construction across metropolitan Perth and contracts for another 84.

Mr Tracy said Deloitte was investigating potential breaches of the Corporations Act, including trading while insolvent.