The administrators of Cubitt's Granny Flats say they have no option but to recommend liquidation after no binding purchase proposals were made for the company.
Cubitt's collapsed in February with debts of almost $7 million.
Administrators identified 373 creditors, including several from the Hunter Region.
About $400,000 has been recouped to date from the sale of company assets including company plant, equipment, motor vehicles and display homes at Maitland Road, Mayfield and Wollongong.
Administrators RSM Australia Partners Richard Stone and Brett Lord said they had received an offer to purchase part of the company - intellectual property and the exclusive right to engage with customers under the company's existing 130 building contracts.
Mr Stone said commercial-in-confidence sale contracts were currently being reviewed.
"We had been hopeful of entering into a Deed of Company Arrangement (DOCA) - a binding agreement between the company and creditors to maximise the chances of it continuing to trade - after identifying more than 40 interested parties and receiving 13 formal expressions of interest," he said.
"We assessed this would have provided a greater return to creditors than a combination of offers to purchase all or part of the company.
"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."
The administrators recently updated creditors on the progress of their work and outlined their recommendations for the future of the company in a supplementary report lodged with the Australian Securities and Investments Commission (ASIC) on 7 June 2024.
Mr Stone said there were only three options available to creditors at the conclusion of an administration: execute a DOCA: end the administration and return the company to the Directors; or wind the company up.
"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."
Since their first creditor's report in April, the administrators have realised $400,000 from the sale of assets.
However, despite these and other asset recovery efforts, the administrators have foreshadowed that "it is uncertain whether there will be sufficient funds available to make a distribution to any class of creditors".
A reconvened second meeting of creditors will be held on 14 June 2024 where creditors will vote on the future of the company, Ian Cubitt's Classic Home Improvements Pty Ltd - formerly trading as Cubitt's Granny Flats and Home Extensions.
