Construction services company Hastie Group, which owns 44 businesses, was forced to appoint administrators after the scale of its problems came to light.
Owing around $500 million, PPB Advisory has deemed the company “significantly insolvent” warning that lenders were unlikely to get their money back.
The collapse follows a number of staff resignations and suspensions after the company uncovered $20 million in accounting irregularities.
PPB Advisory said it would suspend operations on 33 of Hastie's Australian mechanical, electrical and plumbing businesses, which employ about 2700 people.
The remaining 11 companies, which are among the most profitable in the group and have 1300 employees, will continue to operate as usual under the receivership of McGrathNicol.
Following actions by the Electrical Trades Union, Hastie administrators have agreed to terminate staff from Watters Electrical, one of the 44 Hastie businesses, meaning they can now access redundancy payments and begin looking for new work.
It is also believed that as many as 500 employees of NSW electrical contractor, the Heyday Group, have been stood down.
Personal Properties Securities Register
These events highlight the importance of ensuring your business is properly protected by utilising services such as the Personal Properties Security Register.
By registering your security interests in your arrangements with third parties, you reduce your credit risk if the third party goes into bankruptcy or is placed into liquidation.
Master Electricians Australia can provide further guidance on using the Personal Properties Security Register to members.