Builder Schlager Homes goes into liquidation owing about $2.75 million

Award-winning homebuilder Schlager Homes has gone under, stranding 30 families with unfinished houses in Perth and the Great Southern. The collapse comes just two months after the family-owned Schlager Group’s commercial building and maintenance arm was put into administration. Dermott McVeigh, who handled the administration and restructuring of Schlager Group, was appointed liquidator of Albany-founded Schlager Building Services, trading as Schlager Homes, yesterday. The business owes about $2.75m to creditors. Schlager Homes has about 30 building contracts in various stages of completion, including five in Albany where the business has an office. However, with no funds to work with, Mr McVeigh, principal of insolvency firm Avior Consulting, said he had been forced to disclaim the contracts, meaning affected customers will have to call on their building insurance to complete the work. “There’s not much we can do here, there’s no prospect I can finish it,” he said. “We have no money, we’re in the process of disclaiming all of the contracts.” He said Avior would help customers complete their insurance claims and perhaps find new builders, depending on the circumstances. “We are not just cutting them off.” Losses at the homebuilding business are believed to been the cause of Schlager Group, trading as Schlager Construction, collapsing. Mr McVeigh said Schlager Homes, headed by Albany-based director Asher Schlager had tried to trade its way out of difficulty. “That has failed,” he said. Schlager Group had a number of commercial construction and maintenance contracts with Federal Government departments when it collapsed with debts of about $4.5m in mid-April. The contracts, which included school refurbishment projects in Perth, were completed by national labour hire and maintenance group Programmed under an agreement with Avior. The business was successfully restructured, saving 11 jobs and realising payments to some creditors. Mr McVeigh said last month that the restructuring would enable Avior “to pursue claims against various third parties that may result in a return to remaining creditors”” “The likely alternative to this restructuring plan was that the company would be liquidated and there would be no return to any class of creditor,” he said.