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Queensland homebuilder Oracle Building Corporation was placed into liquidation today with debts of $14 million, but red flags indicating problems within the business were raised as early as April this year.
The Logan-based company’s collapse has left in limbo the fate of 300 homes contracted to be built by the company which operates as far south as the Hunter Valley and Central Coast of NSW and north to south-east Queensland.
The liquidation affects Oracle’s trading subsidiaries Oracle Platinum Homes and Oracle Hunter Homes.
According to a statement by liquidators Bill Cotter and Roland Robson, of Robson Cotter Insolvency Group, the company has folded under the pressure of rising building costs.
The problems publicly surfaced earlier this year when Oracle’s homebuilding clients were reportedly angry over building delays and requests from the company that they pay more for the company to finish their homes. Oracle was seeking variations to the agreed price contracts totalling tens of thousands of dollars in some cases.
Oracle director Tom Orel is reported to have told clients at the time he had no choice but to seek a price increase via a post-contract amendment provision.
Liquidators to Oracle Building Corporation say no further building activity will be conducted by the company as a result of the liquidation, with some of the homes not yet started and others nearly completed.
“Mr Orel has highlighted the well-known difficult circumstances prevailing in the construction industry, including the recent and rapid rise in costs of construction materials eroding the company’s margins, and substantial delays experienced in securing supply of materials and labour, as all contributing to the company’s position,” say the liquidators in a statement.
The liquidators have sought to secure the company’s assets and review its financial position, while the employment of Oracle staff was terminated immediately.
“Given our enquiries are at a preliminary stage, we do not currently have firm financial information to provide,” say the liquidators.
“We understand that total creditor claims, secured and unsecured, may be in the vicinity of $14 million, and we are informed that close to 300 homeowners holding building contracts with the company may be affected.”
Court filings show that Oracle has been facing a raft of claims from suppliers this year, including Raven Roofing and Regency Showerscreens and Wardrobes, both of which were filed earlier this month.
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