How A Business Goes From Thriving To Liquidation

How A Business Goes From Thriving To Liquidation

Menzies Advisory works alongside various stakeholders including business owners, accountants and lawyers. When a company collapses a Liquidator is often appointed to guide everyone through the wind up process. Since 2017, Mr Michael Caspaney of Menzies Advisory has been appointed Liquidator of Queensland One Homes Pty Ltd (In Liquidation) when it was placed into liquidation despite what appeared to be several successful prior years.

As the hearing unfolds in Brisbane’s Federal Court as to how Queensland One Home collapsed, attention turned to the accountant and their perception of the company’s finances before the construction company’s collapse in 2017.

The below clipping is from the October 3 issue of The Gold Coast Bulletin Digital Edition. To subscribe, visit https://www.goldcoastbulletin.com.au/.

Q1 ‘thriving’ before fall

The accountant for failed Gold Coast builder Queensland One Homes says it was a “thriving” company with no signs of “going down the tubes” when he first arrived to conduct a crucial review of its finances.

Brisbane accountant Kevin Dellow appeared in the Federal Court in Brisbane yesterday for the third day of a fiveday hearing into the collapse of Q1 Homes.

Q1 Homes, which counts Paul Callender as sole director, collapsed in 2017 owing more than $5.8 million to more than 130 tradies and taxpayers, and leaving families with incomplete homes.

The hearing is the fulfilment of an election-eve funding promise from the State Government and seeks to examine Q1 Homes’ business model in detail and what led to its failure.

Mr Dellow, who first worked with Q1 in December 2013 and was tasked with preparing a crucial financial review for building regulator Queensland Building and Construction Commission (QBCC), gave evidence yesterday that months after he started working with the company he found the accounts a “mess”.

He said this followed an early review he conducted for Q1 Homes that found it had positive net tangible assets thanks to work in progress (WIP) of $2.295 million, ensuring that the company was able to retain its licence.

Counsel assisting the examination Edward Moon had earlier told the court on Tuesday that the WIP figure should have been $1.037 million and had been overstated by more than $1 million.

To be licensed in Queensland builders must meet what are called Minimum Financial Requirements (MFR) to ensure they have enough asset backing to start and finish building projects.

Mr Moon questioned Mr Dellow on the reliability of the figures in his review and delivered to the QBCC for Q1 Homes’ licence in 2014.

“Isn’t it the position given you had only been retained for seven days, and the state of the books when you found them, as at the sixth of December you had no idea what the true financial position of this company was?” Mr Moon asked.

Mr Dellow said: “I had a reasonable expectation that a company as large as this with a turnover in that 2013 year of over $20 million and with a very large staff (was financially sound). Each time I went into the office it was an absolute beehive of activity. It was a bustling thriving business and it certainly did not show the signs of a business going down the tube.”

“So you based it on your impression of how busy the office was?” Mr Moon asked.

Mr Dellow: “That’s putting words into my mouth. It is part of the way I or anyone in my position would assess a company . If it was dead then yes I would take that as being an indication that things are not looking healthy. But it was not the sole point I depended on obviously.”

Mr Dellow said there was “no way in the world” he would provide “dodgy” figures to the QBCC to ensure that a company was able to retain its licence. The hearing continues.

Menzies Advisory

Menzies Advisory Liquidation & Receivers are Certified Practicing Accountants and Registered Liquidators with over thirty years’ experience in commerce and insolvency. Company directors, accountants, lawyers and business consultants turn to us for expert, compassionate advice in difficult times. Our professional consultants implement the most practical solutions to meet your complex business and financial issues.

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