By Alex Turner-Cohen
Employees at a company that went bankrupt owing millions have revealed the desperate measures they took before the collapse.
In the months leading up to the collapse of a plumbing company owing millions, staff revealed the desperate measures they took.
C & S Plumbing Pty Ltd went into liquidation earlier this month, according to news.com.au.
Since 2015, Simon Nelson of BPS Recovery and Reconstruction has been appointed liquidator for the Victorian-based company.
In documents submitted by the liquidator to the corporate regulator, the company had accumulated substantial debts of $12.2 million and had more than 100 creditors. In the four months before it collapsed, Shane Arnold, the sole director, made a number of decisions that have been scrutinized by the liquidator, including paying himself $101,000. News.com.au was unable to reach Mr Arnold for comment.
According to documents filed with ASIC, all 70 employees of the Victorian plumbing firm lost their jobs on the spot while unpaid entitlements totaled $1.9 million.
Ryan*, who worked for C & S Plumbing for a number of years, said he is owed about $10,000 in unpaid superannuation, as well as his final week’s wages.
You’d have to be blind not to see it coming (the company’s demise),” he said.
In the year before C & S Plumbing finally went under, it was evident that the business was struggling.
Due to late payment, the fuel card (for company cars) rarely worked.
Sometimes we had to pay our own money and then get reimbursed.
“The accounts were on hold, so guys had to pay for materials. At first, people said they were happy to help.”
Toward the end, however, doubts set in as to whether they would be reimbursed.
In the last 12 weeks, there would have been 10 to 15 resignations, Ryan said.
When C & S Plumbing went into liquidation, it had 70 employees, down from 100 at its peak.
An additional former employee, Johnathan, says he is owed thousands of dollars in unpaid wages by the company.
He told news.com.au that when the company went under he was working on a job site without getting paid wages.
There has been no payment of what we are owed, and we are still awaiting superannuation and weekly wages.
As Ryan and other employees learned the full extent of the allegations against their boss before C & S Plumbing went into liquidation, they were furious.
“The frustrating part for me, and for 99 percent of the employees, is that we lost our jobs on the spot, had to find new work, and now we see our old boss living his life.”
We may have been unemployed for a month or two, so we can’t do those things.”
The liquidator’s statutory report, filed with ASIC and made public, includes allegations that in the months before C & S Plumbing’s demise, the sole director, Shane Arnold, increased his salary and sold the firm’s assets to another company a family member owned, while using the existing plumbing business to do the work.
According to the report, there are “possible recovery actions” for creditors by pursuing Mr Arnold personally, with allegations of uncommercial transactions.
According to the report, Mr Arnold “began receiving significantly increased wages” from late November until the liquidator was appointed four months later.
As a result, outstanding annual leave and RDO balances were cashed out.
A review of Mr Arnold’s pay slips reveals that he received approximately $101,000 during that time, the report stated.
“These payments would appear to be voidable transactions recoverable in liquidation.”
In addition, C & S employees worked 261 hours for a company called Arnold Land Development. The company’s director is a family member of Mr Arnold, and no wrongdoing has been alleged.
A total of $456,665 in work was carried out at the subdivision, including both hours worked and materials used, but C & S Plumbing never received payment for it.
As of the date of the report, lodged in May, the liquidator’s office had not received a response to its demand for repayment.
A sale of plant and equipment to Arnold Land Development was also considered a “voidable transaction” by the liquidator, which means it was sold for less than it should have been due to the circumstances, and can therefore be seized.
According to the report filed with the corporate regulator, Arnold plans to declare bankruptcy.
While the collapse of C & S Plumbing went mostly undetected, news.com.au reported earlier this year that two other major Victorian plumbers had gone into liquidation. In February, CDC Plumbing and Drainage collapsed owing $7 million to creditors, while Richstone Group liquidated with total debt of $22 million in June.
For a comprehensive guide to plumbing projects and renovations, access a wealth of specialized information you can go to https://www.imperial-restoration.ca/ if you’re fixated on fixing common issues with your plumbing system. Delve into the world of plumbing with insights on diagnosing common issues, such as leaks, clogs, and low water pressure. Learn about the importance of proper pipe materials, fittings, and connections to ensure a reliable and efficient plumbing network as well as 24-hour emergency plumbers.
Get a better understanding of how to install, repair, or replace various plumbing fixtures, such as faucets, toilets, and showers. Learn how to maintain water heaters, troubleshoot them, and choose energy-efficient options. Find out how to avoid frozen pipes, handle sewer line problems, and deal with water quality concerns.
Whether you’re looking to handle small plumbing repairs on your own or considering professional assistance, this invaluable resource provides you with the knowledge you need to tackle plumbing projects confidently. Make informed decisions that result in a functioning and reliable plumbing system in your home by relying on the expertise of experienced plumbers.