In his report, John Morgan noted that Area Projects, the company in question, is believed to owe at least $2.3 million to creditors in unpaid invoices.
The liquidator wrote there was a clear “relationship” between the director, Brett Mcgauchie, and Area Projects, when he went through the company’s records.
“The director and the company regularly transferred funds to each other,” the liquidator’s report noted.
The liquidation report claims the construction firm’s books and records had not been “accurately maintained” and were therefore not reliable. This lack of transparency raised concerns about the true financial state of the company and whether funds were misused, especially in relation to unpaid invoices that remain unresolved.
When the liquidator investigated further, he discovered a “pattern” where customer deposits would be “immediately” transferred out of the business as soon as they were received, to a number of other bank accounts, raising further questions about the handling of unpaid invoices and financial accountability.
Books and Records Inaccuracies
Financial records indicated that Mr Mcgauchie had taken out money from the company as a director’s loan “with a payable balance” of $595,843 at the time of its collapse.
But the liquidation report claims the construction firm’s books and records had not been “accurately maintained” and were therefore not reliable.
When the liquidator investigated further, he discovered a “pattern” where customer deposits would be “immediately” transferred out of the business as soon as they were received, to a number of other bank accounts.
In the 18 months preceding the collapse of Area Projects, transfers totaling $2.545 million were made.
This went on in the last 18 months preceding the collapse of Area Projects, with the transfers totaling $2.545 million.
The millions of dollar’s worth of withdrawals lacked a detailed description, he said, and were sent on to bank accounts “presumably under the control” of Mr Mcgauchie.
Investigations Continued into Unpaid Invoices
“Further investigations were warranted to establish the nature of these payments and whether the director benefited from them,” the liquidator said. “Due to the limited financial information being provided, I have not yet established whether any amount was paid on the director’s behalf or for his own benefit,” he noted later in the report.
The situation highlights the serious consequences of poor financial governance and the importance of maintaining accurate records, especially when dealing with large sums and unpaid invoices. Legal experts suggest that if the funds were used for personal gain, Mr. Mcgauchie could face further scrutiny or even legal action. Creditors are now awaiting the outcome of the ongoing investigation, which could determine whether any of the missing funds can be recovered.
Protect Your Business from Invoice Risks
If your business is struggling with unpaid invoices or unclear financial records, don’t wait until it’s too late. BCR Advisory specializes in helping businesses navigate financial distress through expert restructuring, transparent accounting practices, and effective debt recovery strategies. Our team is here to safeguard your operations and restore financial clarity.