Melbourne builder Avra Group collapses into liquidation owing $1.2m
It’s been revealed that a building company that collapsed earlier this year had just $17.80 left in its bank account.
In July, news.com.au reported that Melbourne-based bespoke building company Avra Group (Aust) Pty Ltd had entered into liquidation.
A report prepared by Philip Newman of insolvency firm PCI Partners, the appointed liquidator, showed that the company owes around $1.2 million to around 37 unsecured creditors.
Avra Group owes staff around $24,000 in unpaid entitlements while other creditors include the Deputy Commissioner of Taxation owed an unknown amount, NAB and Westpac, Bunnings, a law firm and a number of tradies.
“The company operated one bank account with the National Australia Bank which the director has advised held a credit balance of approximately $17 at the date of liquidation,” Mr Newman wrote.
“NAB has since confirmed that the company maintained one bank account which held a credit balance of $17.80.”
In all, Avra Group has total assets estimated to be worth $305,000.
Among those was a vehicle, which the company’s sole director Mark Avramoski possessed, with a realisable value of around $26,000.
Creditors have expressed concern upon discovering that Mr Avramoski has partnered with another business based in Canada, according to an announcement from earlier this month.
“Over the years, Mark has built a reputation for himself as a reliable professional with experience delivering infrastructure projects for local municipalities,” the post, from agricultural tech company North Star Systems Inc, reads.
News.com.au contacted Mr Avramoski for comment.
Although Avra Group only had one live project under way, news.com.au understands a number of customers had terminated contracts as construction on their site stalled for months.
They say this now makes it trickier for them to claim on insurance.
One of those is David Favretto, 45, and his family, who have been in limbo all year as they waited for Avra Group to uphold their end of the building contract.
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“The red flags started to pile up,” the dad-of-three previously told news.com.au.
Mr Favretto signed a $900,000 building contract with Avra Group mid-2022 and for the first three months, everything went to plan.
Finally, Mr Favretto claims an apologetic carpenter approached him and said his team was abandoning the site, as Avra Group owed him more than $100,000, and had not paid up.
He had no success recouping his $40,000 deposit but engaged another builder on the site, where he hit another roadblock.
The cost of the build had snowballed to $300,000 more, including $50,000 to remove the defective frame from the site and start from scratch.
And when the new builders tried to get insurance cover for the work, insurance companies refused.
Throughout the process, Mr Favretto says his family have been living in a “horrid rental” while they wait for their home to be built.
“We’re renting nearby at extortionate rates having forfeited the luxury of a dishwasher, have three possums in the roof and walls, mushrooms growing from seven places in the bathroom, worms and slugs coming out of the drain almost daily, you have to switch off the heater if you want to use the toaster … and three boys crammed into a small bedroom.”
Building industry in crisis
ASIC insolvency statistics show 2213 building companies collapsed during the 2022-23 financial year — a 72 per cent increase on the previous 12-month period.
The alarming trend has been blamed on a “perfect storm” of factors, including fixed price contracts, escalating costs, supply chain disruptions and tradie shortages.
The previous Morrison government’s HomeBuilder grant, which was introduced in June 2020 and handed out $2.52 billion to owner-occupiers who wanted to build or substantially renovate a home, turbocharged the sector.
More than 130,000 customers signed on for the program, with many tradies agreeing to the work under fixed-price contracts that soon became unsustainable as prices began to soar.
This year alone, news.com.au has reported on dozens of major builders that have collapsed.
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Australia’s 13th biggest builder, Porter Davis, also collapsed earlier this year, placing 1700 projects and another 779 empty blocks of land in jeopardy across Victoria and Queensland, while more than 1000 unsecured creditors are owed a whopping $71 million.
In one week in July, news.com.au reported on a new builder going into external administration every day.
alex.turner-cohen@news.com.au
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