Fairview Architectural Pty Ltd, a leading supplier of ACM panels, has addressed the challenges faced by cladding-related litigation, Covid-19 and customer failures leaving large debts and has voluntarily appointed Grant Thornton to administer (not liquidate as reported elsewhere), the company's affairs. The goal is to emerge from administration and keep all 52 jobs.
|Fairview's expansive HQ and distribution centre at Lithgow, NSW|
A Fairview company statement posted on its website follows:
"Following a series of company and industry challenges – which includes COVID19 – Fairview Architectural Pty Ltd has initiated a voluntary administration of its business.
The firm has recently spent almost $1.5million defending a class action claim brought against it and the cost of continual legal defence threatened the company in the long-term.
While Fairview Architectural Pty Ltd believes there was no legal liability on it, the firm has engaged good faith settlement negotiations.
Facing such cumulative pressures, the Directors have made the tough decision to place Fairview Architectural Pty Ltd into voluntary administration and its Directors will work very closely with expert administrators, Grant Thornton. If the process goes as intended, it is hoped that Fairview’s business will continue to survive, that the 52 employees of Fairview will retain their jobs and a resolution that is in the interests of stakeholders can be secured."
Wideformat Online has contacted Fairview for further comment.
|Some of the Fairview staffers at a recent Appreciation Day|
Publisher Andy McCourt, who has experience in industry administrations and insolvencies comments:
This is one administration that I expect will come through and be handed back to the Directors or new owners by Grant Thornton. Administration is a valid business process, to sort the company's affairs out and provide respite from bank and other pressures while professional business administrators handle the running of the business, try to collect overdue monies and negotiate with creditors. Fairview has been hit by a perfect storm and they are not alone. In appointing an administrator sooner rather than later, the prospects for both company and employees is brighter than many other admins.
The colossal legal fees incurred defending the cladding class action - and as they say: 'engaging in good faith settlement negotiations' - is already counted in the millions and shows the good faith and intent of the Board, while admitting no legal liabilities.
|Vitracore G2 is all-aluminium|
No Fairview products have been clad in buildings that have caught fire. Fairview's managing director Andrew Gillies has been very supportive of the Government bans on using PE-cored ACM and also, as soon as issues with PE misuse became confirmed, Fairview proactively moved to write off its stocks of PE panels and looked to partner with a specialist recycling firm to develop a process of recycling PE panels. For some years, Fairview has sold its Vitracore all-aluminium cored product for facade use that has included hospitals, defence installations and stadiums.
It should be remembered that administration is not liquidation nor receivership - it is a business process when deployed correctly, can turn-around companies and protect jobs. The Fairview case is obviously not one where administration is used to get out of debts (which we have seen far too much of) - the company has assets, cashflow - sales somewhere north of $10 million p.a. and a global reach plus - more importantly - an ethical commitment to address very challenging times. We wish them well.