Federal court grants PBS administrators more time to finalise their investigations

The Federal Court of Australia has granted PBS Building Administrators until 30 June 2023 to complete their investigations into five of the firm’s construction companies.

The Administrators – RSM Australia Partners Jonathon Colbran, Richard Stone and Mitchell Herrett – applied for an extension of the convening period – the statutory timeframe in which certain activities must take place during a voluntary administration – due to the complexity of the administrations.

In handing down his judgement on 4 April, the Hon Justice John Halley described the extension as “not unduly lengthy’’ and “proportionate to the complexities of the PBS Companies’’.

“I am satisfied that the Administrators are confronted with relatively large and complex administrations and they need further time to pursue the key tasks summarised … in order to assess the financial position of the PBS Companies and provide creditors with sufficient information to make an informed decision at the second creditor’s meeting.’’

Mr Colbran said the Administrators now have up until 30 June 2023 to lodge the final creditor’s report and up to 7 July to hold the second creditor’s meeting.

“We are currently advising creditors of the Court’s ruling and the amended timelines for the delivery of our report and the second creditor’s meeting, noting that if the Administrators are able to deliver the final report earlier, we will.”

Mr Colbran said extending the timeline to resolve the future of the PBS Building companies was in the best interest of creditors.

“We understand that all stakeholders want to see the future of these companies and the outcomes for creditors resolved as quickly as possible so that everyone has a clear path to move forward,’’ he said.

“However, we cannot sacrifice the potential financial return for creditors for a speedier resolution. That’s why we sought the extension of the convening period.

“We are continuing to work around the clock to unpick the highly complex and detailed contractual, legal, insurance, operational and legislative issues associated with investigating the operations of five different companies engaged in multi-million-dollar contracts across 82 projects in three different states and territories.”

Justice Halley also ruled in favour of the Administrators’ request to maintain the existing PBS Building bank account structure that was in place at the time of their appointment, recognising that it “will streamline the administrations and create efficiencies’’.

Mr Colbran said: “The Administrators flagged this situation with creditors at our first meeting on 17 March. Currently there’s one centralised treasury account for all entities. This is not an uncommon way for companies of this size to structure their financial accounts.” 

Mr Colbran said the Administrators advised the Court that the number of claims lodged by creditors covering the ACT, NSW and Queensland had now reached more than 450, but there was reason to believe there may be some duplication across claims, for example between principals and subcontractors.

“New lodgements followed the meeting of creditors on 17 March. This number may change still as claims are assessed and verified over the course of the administrations,’’ he said.

“The additional claims, combined with further investigations by the Administrators, have lifted the current estimated value of creditor claims to more than $60 million across all five PBS companies. However, the final figure will not be known until the Administrators complete their investigations and detail their findings in the creditor’s report. A significant number of creditors have, for now, lodged claims that are preliminary estimates.’’

A copy of the reasons given by the Hon Justice John Halley can be obtained from the Federal Court of Australia’s website using the citation “Colbran, in the matter of PBS Building Pty Limited (Administrators Appointed) [2023] FCA 276”.

Creditors affected by the administration of the PBS construction companies should contact RSM via email at [email protected] or at (02) 6217 0228.