Richstone Plumbing Group - Case Update

David Coyne and Peter Krejci of BRI Ferrier have given an update on their administration of the Richstone Plumbing Group, a Victoria-based business providing plumbing contractor construction services, predominantly to large and well-known building companies in the construction industry. The group entered voluntary administration on 3 March, 2023 owing creditors over $20 million. COVID shutdowns, supply chain restrictions and other unfavourable market conditions took their toll on the business, with revenue declining by almost $17 million in the last two years. Unable to access additional financial support, the company began to use the Commissioner of Taxation as a form of financing. At the time of the group’s collapse, it was owed over $18 million. The group’s financial difficulties also hindered its ability to win new work, as builders would not award new contracts until the business proved to be financially viable again. The company had virtually no cash upon the administrators appointment, making trading impossible. A sale of the business was quickly arranged to certain of the group’s directors, which saved 150 jobs and was one of the key reasons the court approved the sale. Solicitors assisting with the sale were Mills Oakley for the administrators, Maddocks for secured creditor CommBank and Hall & Wilcox for the purchasers. With the business transferred and no DOCA proposal being put forward, the administrators are now recommending that the companies be placed into liquidation. Full report.