The administrators of a family-owned granny flat construction business say they have "no other option" but to recommend liquidation after no binding purchase proposals were made.
Cubitt's Granny Flats and Home Extensions has been formally recommended to "wind up" despite receiving early interest from prospective buyers and an offer to purchase part of the company.
More than 40 parties expressed interest in the business, but none of them came forward with a binding deal, administrators said.
A co-owner said they received an offer to purchase part of the company, including its intellectual property and exclusive right to engage with customers under existing building contracts. The commercial-in-confidence sale contracts were currently being reviewed.
Multimillion-dollar recoup uncertain
Cubitt's Granny Flats and Home Extensions went into voluntary administration on February 27 2024.
Administrators have recouped around $400,000 from the sale of company assets including company plant, equipment, motor vehicles and display homes at Wollongong and Newcastle.
About 200 creditors were owed $3.8 million, according to the liquidators. Eleven of the company's 130 building projects were in Canberra.
Administrators said it was uncertain "whether there will be sufficient funds available to make a distribution to any class of creditors".
Cubitt's had a display office in Fyshwick, which was taken over by the administrators .
The privately-owned company had been building self-contained homes and extensions for 30 years.
Creditors will vote on the future of the company in a second meeting on June 14.
Limited options for company's future
Administrator Richard Stone from RSM Australia said they were left with only three options at the end of the administration period.
He said they had been hopeful of entering into a deed of company arrangement (DOCA) - a binding agreement between a company and creditors to maximise the chances of it continuing to trade.
The administration was in contact with more than 40 interested parties, and received 13 formal expressions of interest.
"However, after making available all the company's financials and other critical business information to two key parties, no formal DOCA proposals were put forward," he said.
"Therefore, we have been left with no other option - after almost four months of investigations and negotiations - than to recommend to creditors that the company enter liquidation."
At the end of an administration period, businesses must either execute a DOCA, end the administration and return the company to the directors, or wind the company up.
An arrangement usually provides a greater return to creditors than a combination of offers to purchase all or part of the company.
