Porter Davis liquidators sell IP to two unnamed "leading residential builders"

The liquidators for Porter Davis Homes (PDH) have announced the sale of the collapsed company's intellectual property to "two of Australia’s leading residential builders", although they have declined to disclose the names of the buyers due to confidentiality reasons.

The sale specifically excludes any rights or intellectual property associated with Englehart Homes which continues to trade as normal and is not in liquidation, and also makes allowances for existing PDH customers to use the IP on a fee-free basis if they are still in the process of completing their homes.

The liquidators at Grant Thornton have separately communicated to customers the process by which they can access the drawings and technical information for their home build.

"It is pleasing to see the market recognise the value of the PDH brand and the intellectual property it has developed over so many years," says Said Jahani, joint and several liquidator from Grant Thornton.

"This transaction will allow these designs to be used by the two new owners in their operational footprints."

Curiously, a document from one of Australia's largest home builders, Simonds Homes which is part of ASX-listed Simonds Group (ASX: SIO), was published within a Porter Davis Homes discussion group on Facebook even though the company is not one of the shortlisted builders announced by Grant Thornton on 6 April. 

The document was a Letter of Authority for a customer to designate Simonds Homes as their representative.

A spokesperson for Grant Thornton could not confirm or deny that Simonds Group is one of the buyers of the IP. 

Late last week, amidst speculation that the Victorian Managed Insurance Authority (VMIA) had recommended Simonds take over some builds, Business News Australia reached out to Simonds Group CEO Rhett Simonds for commentary.

The executive declined to confirm or deny any arrangement.

"What I will say is it's absolutely terrible to see what's happened within the industry. It's been terribly unfortunate to see some of these builders not being able to trade through the period that we find the industry in, and fundamentally it's even more disheartening to see customers - a lot of them have spent their life savings on building a home and they're in a position where it's now taken a bit of a turn for the worst," Simonds said.

"I can't talk specifics around exactly what we are doing, but we are looking pretty proactively around how we can help, and what we can do for these customers that find themselves in the predicament of not having a builder to complete their homes.

"We've been in discussions with the VMIA  and we're working through a process that ultimately can assist all parties, being the customer and also the VMIA, but we don't have resolution or finalisation of what that looks like at this stage, so I can't comment any further on that."

When asked about any discussions or agreements with Simonds Group, the VMIA also declined to confirm.

"On the Porter Davis matter, we’re working with a range of builders with capacity to complete homes in line with owners’ original contracts. We’re working with these builders to obtain quotes as a matter of urgency so that claims can be processed as quickly as possible and works to finish the homes of impacted customers can continue," a VMIA spokesperson said.

"We acknowledge that many customers have obtained independent quotes from builders of their choice, and we respect their right to do so. Any such quotes will be assessed as part of our claim decision process."

The builders shortlisted by Grant Thornton in April to assist customers were Aliya Homes, Beachwood Homes, Watermark Homes, Glenvill, Goldstate Homes, Granvue Homes, Langdon Building, Long Island Homes, Oreana Homes, Symmetric Homes, Verv Group, Z&Me Group, Bold Living and McCarthy Homes. 

It is understood that neither of the two buyers of the IP is in the above shortlist. 

14 companies that are part of the PDH group went into liquidation at the end of March, leaving 1,700 homes under construction in the lurch, predominantly in Victoria although 200 are in Queensland. The group also had a further 770 contracts with customers where building had not yet commenced.

In a virtual customer call the following week it was revealed that in many cases Porter Davis had not correctly filed for home building insurance after receiving deposits from customers. Rather, the company waited until projects started before filling out the paperwork, and it was revealed that this practice left some customers technically without insurance.

In response, a few weeks later the Victorian Government announced compensation payments for about 560 Porter Davis customers who found themselves in that boat of being uninsured. Refunds will be paid up to the legal maximum deposit payment under the Domestic Building Contracts Act of 5 per cent.

“Customers without domestic building insurance cover will now be treated as if they had the cover Porter Davis had been obliged to take out on their behalf," the Victorian Government said.

Some builders have also indicated they had received queries from Porter Davis customers with contracts for builds at prices well below what they would have charged for the same projects.

According to one post within the discussion group on Facebook, the following builders will not be accepting builds from Porter Davis customers: Metricon, Bentley Homes, Inspired Homes, Orbit Homes, Arden Homes, Carlisle Homes, SJD Homes, JG King Homes, Kingsbridge Homes, Mimosa Homes, and Ryan Developments.