Missed deadline threatens Nicheliving directors’ bid to regain control
Nicheliving executives’ bid to regain full control of the organizations is in limbo after missing a deadline to sell its Northbridge offices, a key condition of its buyback plans.
Under Ronnie Michel-Elhaj and Paul Bitdorf’s company arrangement (DOCA) deeds to take two of Nicheliving’s entities out of administration, the administrators were required to sell their office buildings within 280 days of the DOCA coming into force in January.
The administrators’ report on the organizations states that failure to do so could lead to buyback agreements being amended, terminated or organizations going into liquidation.
As that deadline came and went, Nicheliving executives requested and received a six-week extension from KordaMentha executives to “evaluate their options.”
RWC WA were the agents selected to sell the vacant 912sq m commercial office building spanning four floors, located on the corner of Newcastle and Money Street in Northbridge.
The majority of the couple’s $2.7 million DOCA fund will be funded by the sale of 180 Newcastle Street, which is expected to generate sales proceeds of $2 million, according to the manager’s report.
Based on administrators’ estimated timeframe, it was initially expected that the office building would be sold in mid-June, paying dividends to unsecured creditors, and the DOCA would be signed by the end of September.
Perth’s office vacancy rate is among the highest in the country, and office sales have remained low since 2022.
While managers ultimately retained control of Nicheliving’s operations, directors were responsible for day-to-day operations during this period, where conditions had to be met or waived to regain full control.
KordaMentha directors Richard Tucker and John Bumback told creditors they had agreed to an extension until November 24 with various conditions.
Practitioners said extending the deadline would provide creditors with greater returns than immediately liquidating Nicheliving assets.
“The title administrators agreed to the extension of the expiration date based on their assessment that, in order to satisfy the conditions precedent under the DOCAs, this provides creditors with every opportunity to obtain a return superior to immediate liquidation,” KordaMentha wrote.
One of the conditions of the extension is that the managers cover outstanding DOCA payments of $115,000 and that a junior mortgage be issued on one of the property units to secure the managers’ payment obligations under the agreement.
Nicheliving, which had 230 unfinished homes on its books when it collapsed, is selling properties and development sites in various stages of development around Perth.
The appointment of administrators opened the door for homeowners to apply for home indemnity insurance and appoint alternative builders to finish their long-rewarded builds.
It has been almost a year since the beleaguered construction company’s directors first met with executives on October 23 last year, two weeks before their official appointment.
Administrators were called in to take control of three Nicheliving entities in November after the housebuilder agreed to give up its registration battle in the courts.
Mr. Michel-Elhaj and Mr. Bitdorf subsequently proposed DOCAs for Nicheliving Holdings and Projex Management & Construction, two of the three entities in administration.
This all comes after the state government revoked Nicheliving’s building permit and banned the company and its executives from building for a decade.
Nicheliving could not immediately be reached for comment.
