Staff, contractors, and customers are still in the dark and wondering what to do as Shane Crothers Homes has still not entered into administration, despite Mr Shane Crothers telling staff, creditors and customers it was happening about 25 days ago.
Mr Crothers also told customers that he had sold the business. Everything Geraldton has learned that this is not the case.
A group of creditors who claim they are owed large sums of money have joined forces to try and make something happen, after still not being informed of who the administrator is.
Below is a copy of original letter sent to customers around four weeks ago. It states that Shane Crothers Homes was to enter into Voluntary Administration immediately. Mr Crothers also told Everything Geraldton himself that Shane Crothers Homes Pty Ltd had entered into voluntary administration.
Several staff from Shane Crothers Homes have contacted Everything Geraldton upset that they have not been paid money they are owed, have not been fired or let go officially, and have no idea what is going on. Apart from being owed holiday pay and entitlements, we were informed that some of the staff were still attending work until recently.
Multiple customers who were building homes through Shane Crothers Homes have also spoken with Everything Geraldton asking if anyone knew if the company had entered into administration yet, as they have been unable to move forward with insurance claims etc, and are just sitting in the dark.
These are copies of emails sent to staff of Shane Crothers Homes over the last week or so, provided to Everything Geraldton by staff of Shane Crothers Homes.
In one of the letters Mr Crothers blames a technical issue with the banks, lawyers and accountants for the delays.
Debbie Crothers contacted Everything Geraldton upset over a comment made on our website claiming they were "rubbing their hands together".
"It's all lies," she said. "It's just not true. We've lost everything. We even had to sell the boat to make sure everyone got paid."
What happened with the supposed sale?
We spoke with a local builder Mick Desmond, who told us he had been in discussions to take over the building of the homes through his company Norwest Building Group. "We were approached and asked if we would like to finish the houses off," Mr Desmond told us. "We said yes. I talked to some of the creditors and tried to get to the bottom of which trade did what on each home [in an attempt to be able to use them again on that home]."
Mr Desmond tells us the plan was for him to pay a sum of money into a trust account, which would then apparently be used by liquidators. In exchange Mr Desmond would then complete the building of the homes using tradies and contractors that were originally used on the homes. The contractors would not have received old monies they were owed, but the intention was to provide them work moving forward, according to Mr Desmond.
Mr Desmond said he did not go through with the arrangement, and walked away from it last night.
"I couldn't get to the bottom of how it's going to work. I couldn't get a guarantee of where the money would go," said Mick Desmond. "I met with Mr Crothers yesterday as part of doing due diligence," he said. Mr Desmond told us he wasn't satisfied with the state of the stocktakes he saw on the homes, and decided to walk away from the arrangement.
"We're happy to still be involved in finishing the homes," said Mr Desmond. "However we've exhausted all opportunities through this avenue."
We asked Mr Desmond who it was that approached him to ask him if he wanted to finish building the homes, and were informed by him that it was representatives from a company called Hall Chadwick.
Who is Hall Chadwick?
Hall Chadwick, according to their website, is a Chartered Accountant and Business Advisory firm with offices around Australia, including Perth.
Everything Geraldton contacted them to ask questions regarding their involvement with Shane Crothers and Shane Crothers Homes, but they were not willing to talk.
"We respectfully decline to make any comments in relation to Shane Crothers," was their response.
Will people still get their homes built?
From the Department of Commerce for WA:
Residential building work contracts in Western Australia are governed by the Home Building Contracts Act 1991 (the Act). If residential building work valued over $20,000 is to be undertaken, the Act requires that a builder take out home indemnity insurance in the name of the owner before accepting payment or commencing work.
What is home indemnity insurance?
HII protects owners against financial loss if a builder cannot complete residential building work or meet a valid claim for faulty or unsatisfactory building work because of death, disappearance or insolvency.
Based on information provided by Dept of Commerce, it appears customers should be insured for exactly this kind of situation, and are able to have their homes completed if their builder becomes insolvent. The policy is in the name of the owner, not the builder.
So what now?
We contacted Mr Shane Crothers this morning, who rang us back, but was not willing to make any comments at that time, other than that he was going to make a comment later this afternoon.
We asked if it was true that the company still had not entered into administration, and were told a comment would be made later this afternoon.
We asked if was true that Mr Crothers was leaving Geraldton, as per assertions made by creditors today. Again we were told a comment would be made this afternoon.
We will update this article when Mr Crothers provides said comments.
Update: Mr Crothers has sent the following statement
Our key priority throughout this process has been our clients. Our clients have been kept informed of our efforts to find another quality builder to facilitate a fast takeover of the unfinished jobs, avoiding delays related to the Home Indemnity Insurance system.
This process has unfortunately taken a lot longer than we had anticipated due to negotiations with all parties involved and we regret the effect this has had on our clients, staff and creditors.
We will proceed with appointing a liquidator next week.
Isn't liquidation different to administration?