Long road ahead for Privium creditors

Privium director Robert Harder is a senior member of the evangelical church, and has said he is 'deeply sorry' for putting Privium Pty and eight related entities into voluntary administration on November 17.

Hunter home owners caught up in the collapse, with half-finished homes, and some who have paid deposits with no home warranty insurance attached, were stunned when Privium workers stopped taking calls, and subcontractors suddenly downed tools just days before the announcement.

At the first meeting of creditors held on Monday, home owners and subcontractors were told are they, as unsecured creditors, are owed upwards of $17 million. They were also told that Privium has only about $2 million in assets, while owing secured creditors more than $23 million.

That amount alone is owed to the Bank of New York and will be investigated to determine its legitimacy. One of three appointed administrators from FTI Consulting, John Park confirmed they would also be investigating the writing down of an investment of nearly $12 million to $615,000, and $18.9 million paid in dividends.

The $12 million investment was the purchase of 18 per cent of a company called Growme for $11.9 million in the 2019/20 financial year, it's value dropping on paper from $67 million to just $3 million in 12 months.

"Yes, we've seen funds go outside of the Privium group," Mr Park said. "That is a major focus of our investigations. It's something that we've identified and that we're looking at - funds out, whether it's a loan or a donation, we need to understand the transaction and why it's gone out, we need to determine how it's been done.

"We are trying to reconcile how that occurred, and loan accounts, and any other funds that were paid out to other companies."

Creditors lost a vote to oust FTI Consulting as administrators, who were appointed by Privium director Robert Harder on November 17.

While 79 per cent of the vote was in favour of ousting FTI Consulting, the 18 who voted against it held the more valuable vote in dollars terms, being owed more than 25 million or 85 per cent of the total. The motion was dead locked and administrator Joanne Dunn, who could have used a casting vote, abstained from voting.

John Goddard of Subbies Unite, said if the value of the $23 million debt to the Bank of New York was not accepted, the 44 homeowners whose proxy vote he held would have won the day.

"It was a great effort by creditors to win the vote by such a large amount and we will have another go at the next creditors meeting in December where all creditors should participate and there are hundreds of them," Mr Goddard said.

Those who have paid deposits for Privium homes but received no certificate of insurance would not be covered by insurance, administrator Kelly Trenfield confirmed on Monday.

"We are still getting to the bottom of how many of those people actually paid a deposit, it's a relatively low number in the scheme of things," Ms Trenfield said.

Whether the responsibility lay with those clients' first point of contact, or whether there were failures further up the food chain remained to be seen, she said.

"It's too soon to tell."

Those with part builds or defects affecting their completed homes, their claims would be covered by insurance, she said.

Across the three states of NSW, Victor and Queensland there are a total of 1,523 homes affected, with 306 of those located in NSW, with the majority, 119 in the 'pre-construction' phase, 99 are mid-build, and 70 are completed, but in some cases keys have not been handed over or clients have claimed their build has defects.

The next creditors meeting will be held on December 22, with a report due the week before.

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