Couple devastated as builder goes bust
IN 2013 Beau Harthshorn was undertaking the biggest contract the landscaping business he owned with his wife Kerry had ever secured.
Life was good and left them totally unprepared for the devastation to come.
The couple lived on acreage at Pomona with their children, four-year-old son Jett and 12-year-old Macey who both owned ponies.
A mortgage on the property provided the cashflow to sustain the business between progress payments from builders.
Many small business subcontractors operate in the same manner.
Beau's a smart guy. Earthscapes had 10 employees and there were a couple of other good jobs to follow.
Kerry and Beau met when he was 17 and she 16. Kerry worked with Beau's mum.
They were confident. The contract was with what they thought was a profitable national construction company for national retailer Wesfarmers.
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The project was the Nambour Coles supermarket. Earthscapes had done what it was contracted to and was owed more than $500,000.
Unbeknown to Beau and Kerry that job, which was completed late September 2013, was the final jigsaw piece in a plan hatched in April that year by Walton sole director Craig Walton and advisory business Mawson to pay down debt to the NAB before transferring assets to a phoenix company.
They were never going to be paid.
Mawson had been recommended to Mr Walton by NAB after it became concerned about the business in 2012.
On December 14 last year in the Brisbane Federal Court Justice Roger Derrington found that the strategies engaged by Mawson from April through to September 2013, including a series of asset sales agreements were pursued to "extricate the NAB from the Mawson Group and, thereby, relieving Mr Walton and his associated companies from liability under any guarantees securing the NAB debt.
This was clearly the primary objective of Mawson's strategy and the restructuring was part of that. There is nothing in any of the documents which suggests that Mr Walton or Mawson had any consideration to the interests of Walton Qld or Walton Construction or their unsecured creditors, in particular".
Justice Derrington accepted the evidence of Michael McCann for Walton liquidator Grant Thornton that new unsecured creditors, generally in the form of subcontractors, would be created with the cashflow (from the income they generated) used to discharge the secured creditors' debt.
Mr Walton is a member of Melbourne's Royal Brighton Yacht Club where he races a 42-foot Beneteau called Y-Knot.
The exercise allowed NAB to be relieved of its $18 million exposure to the builder, in the process relieving Craig Walton of his exposure to the bank.
For the Hartshorns and 1300 subbies and suppliers across Australia the realisation of that exercise was to prove devastating.
Earthscapes went into liquidation as they realised they were not able to pay creditors, 10 people it employed lost their jobs, the kids lost their ponies and the family their home.
"Beau carried it on his own for a few days before he told me," Kerry said, breaking her five-year silence about the impact.
"I could tell something massive was going on because Beau was not sleeping through the night.
"When he did I felt disbelief. I panicked. How would it affect us? What will we do? What will happen?
"We had been excited for the future. We had thought this is (the business) beginning to go to the next tier. We were excited for the future. That excitement faded.
"We think of ourselves as honest. We'd hear stories of it happening, but you don't think it will to you.
"Being a mother, my main concern was the kids and their schooling.
"It was gut-wrenching telling them we had to sell the ponies. That was one of the hardest things.
"We had to sell the house, pay what we could and look to family.
"It was fortunate to have family is all I can say."
For the past five years Beau, Kerry, Macey and Jett have lived with his parents at Eumundi. The couple have all but given up hope of ever owning a home of their own.
Kerry said what had happened had impacted their children's views of the world.
"Our daughter is now 17," she said.
"She doesn't trust anyone. Her career choice is to be a lawyer and become a judge. She sees injustice and wants to put bad guys away.
"She's seen her father broken and build back up in personal strength. Where Beau is now in himself is the best he's been since it happened.
"It's affected out relationship. It's been difficult, really difficult.
"It's sad to be truthful.
"When you think it being Coles as the client and a really big national developer at that level.
"People don't fathom NAB's involvement. It's just criminal.
"If they did take a hit no-one would have noticed.
"But there's been all these lives affected by this.
"It will be forever with us. It's changed so many lives."