Building contractor Les Williams lost nearly $700,000 when Walton collapsed. (ABC News: Chris Gillette)
Creditors who lost money in the collapse of a major construction company are attempting to sue the National Australia Bank (NAB) for $74 million.
- The Federal Court has appointed a Special Purpose Liquidator to investigate NAB’s role in the collapse of Walton Construction
- The Liquidator will look at the relationship between NAB and the restructuring advisory firm Mawson Group
- More than 1,000 creditors lost over $70 million when Walton collapsed
The creditors successfully applied to the Federal Court to appoint a special purpose liquidator to examine the bank’s role in the 2013 collapse of Walton Construction.
The special purpose liquidator will look at the relationship between NAB and a restructuring advisory firm, the Mawson Group, which put in place a complex set of changes to Walton Construction in the weeks before its collapse.
The effect of these changes was to remove $18 million in unsecured NAB loans to Walton, so the bank lost nothing when the company went into liquidation.
Walton Construction was a big player in the building industry in Queensland, Victoria and New South Wales.
But by early 2013, according to auditors’ reports, it was either close to, or actually, insolvent.
In October of that year it went into voluntary liquidation, with tens of millions of dollars in debt.
‘There’s no justice’
Roofer David Panetta lost more than $150,000 and had his house repossessed as a result of the Walton collapse. (ABC News: Gus Goswell)
Retired Sunshine Coast building contractor Les Williams, who lost nearly $700,000 in the building collapse, said creditors have a strong legal case.
“We believe there is a wrongdoing here, so we want to pursue it,” he told 7.30.
“People say to me I’m just a disgruntled old bugger — and they’re right, I am very disgruntled.”
“There’s no justice,” said Melbourne roofer David Panetta, who lost $170,000 when Walton collapsed and eventually had his house repossessed by NAB.
“It’s whoever has the most money wins.”
Brisbane developer Lenny Willis was also stung by the financial disaster, losing $5 million.
He said there appeared to be close collaboration between Mawson and NAB.
“From the documentation I’ve seen, it was a very close relationship, there was continual liaison, reporting and discussions,” he told 7.30.
Developer Lenny Willis has examined documentation on the relationship between Mawson Group and NAB. (ABC News: Chris Gillette)
In a related case late last year, Federal Court Justice Roger Derrington noted the close relationship between the restructuring company and the bank.
“The ‘restructuring’ service provided by Mawson was for the purpose of advancing the interests of the NAB,” he said in his decision.
He also found Mawson “received substantial fees for its services”.
More than 1,000 creditors
Sub-contractors working on the Nambour Mill Village shopping centre were left out of pocket by Walton Construction. (Source: Nambour Mill Village Facebook)
Lawyers acting for the Mawson Group defended the company’s actions.
“Our clients are confident their conduct has been proper and lawful,” they told 7.30.
The special purpose liquidator appointed by Federal Court Justice John Reeves will now examine whether the NAB was involved in “any breaches of statutory or fiduciary duties”, including being involved in a company trading while insolvent.
Barrister and former ASIC investigator, Niall Coburn, is assisting the creditors.
“Our clients are very happy, we have a special purpose liquidator appointed in relation to the Walton issue,” he told 7.30 outside court on the day the orders were granted.
Mr Williams is now trying to raise funds for a class action.
“We hope to have the NAB compensate people for their losses, there’s 1,400 people who lost in the vicinity of $74 million,” he said.
NAB told a 2015 senate inquiry that it did not know the true financial position of Walton Construction and rejected the allegation that it arranged for Mawson to protect the bank’s interests.
The senate inquiry however expressed “serious concerns” over the relationship between NAB and Walton, and raised the possibility that the bank “may have facilitated illegal phoenix activity”.
In a written statement to 7.30, NAB general manager of strategic business services, Ross McNaughton, confirmed the bank was aware of the appointment of the Special Purpose Liquidator.
“We understand many unsecured creditors, including sub-contractors, were negatively affected by the insolvency of Walton Construction, and we appreciate the impact that has had on everyone involved in those businesses,” he said.