CREDITORS owed up to $80 million by the embattled Reed Construction group are concerned that a contract Reed holds on the Law Courts project has been transferred to another company owned by Reed founder Geoff Reed.
The transfer this week heightened concerns that Reed is on the brink of seeking voluntary administration.
Law Courts Limited said yesterday it had agreed to a proposal by Reed Construction Australia to novate the construction management contract Reed held for works at the courts to RBG Holdings Group Pty Ltd, the holding company for the Reed Group. It stressed that the overall $300 million project was with firm LCL, not Reed.
It said the measure would ensure continued employment of Reed Constructions project staff, ”retaining significant experience and knowledge of the project in its final stages”, and would also put in place a mechanism that retained all existing employment entitlements for the Reed workforce.
Law Courts said it provided ”the most certainty for the project to continue uninterrupted and avoids lost time and additional costs given the current circumstances surrounding Reed Construction Australia. Law Courts Limited intends to complete the project using the existing resources and contractors on site.”
The novation of the contract comes at a tense time for the company and its subcontractors and suppliers, many of which have not been paid for six months. Reed faces a wind-up application in the New South Wales Supreme Court next week from three creditors.
Reed’s future was under new pressure last week as the NSW Department of Education said it did not owe it money under Building the Education Revolution. Reed claimed substantial sums were owed under BER, and from road projects. Reed said last week it was still negotiating its BER claims.
This story Administrator ready to work first appeared on Nanjing Night Net.