CREDITORS who are owed up to $80 million from 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 the Reed founder Geoff Reed.
The transfer this week heightened concerns Reed was on the brink of seeking voluntary administration.
Law Courts Limited said yesterday it had agreed to a proposal from Reed Construction Australia to novate the construction management contract Reed held for works at the courts to RBG Holdings Group Pty Ltd, the Reed group’s holding company. It stressed that the overall $300 million project was with a firm, LCL, not Reed.
It said the measure would ensure the ongoing employment of Reed Construction project staff ”thus 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 whom have not been paid for six months. Reed faces a wind up application in the NSW Supreme Court next week from three creditors.
Reed’s immediate future was put under further pressure last week as the NSW Department of Education said it did not owe Reed any money under the Building for the Education Revolution. Reed had claimed substantial sums were owed under BER, and from road projects. Reed told BusinessDay last week it was still in negotiations over its BER claims.
This story Administrator ready to work first appeared on Nanjing Night Net.