Day sent an email to colleagues announcing his resignation from the Senate today, saying he was going to lose the family home because of the liquidation of home building business the Home Australia Group.
According to liquidator McGrathNicol, the Home Australia Group has stopped works on more than 200 homes that were under construction around the country – including 48 in South Australia – as a result of the collapse.
“With great sadness I am writing to let you know that earlier today, the Home Australia Group of companies went into liquidation,” Day’s email reads.
“… Having been in business for over 40 years, I am naturally devastated by what has happened and will do whatever I can now to assist those affected by this closure.
“All homes under construction are covered by Home Owners Warranty insurance.
“As I have always agreed to sign personal guarantees to creditors, this closure also has serious implications for me and my family.
“Creditor liabilities greatly exceed our assets so we will also lose our family home.
“As for my role as a Senator, I will of course resign.”
Full statement that was sent to the Australian newspaper regarding their Home Australia stories. I stepped back in to help out. pic.twitter.com/cFhzNZ54wY
— Bob Day (@senatorbobday) September 28, 2016
The Australian Constitution disqualifies any person who is insolvent or bankrupt from being a member of federal parliament.
Day says in the email that the liquidation of his company was forced after a deal with Philippines-based real estate investment firm Goshen Capital Resources to purchase a 75 percent stake in Home Australia fell through.
“I had based all creditor payment plans and commitments on this deal going ahead,” Day writes.
“Given the strict ‘trading while insolvent’ rules that apply in Australia, it would not be possible now for the business to continue operating until another buyer is found.”
Day writes in the email that: “I am incredibly sorry for the pain, stress and suffering I know this will cause.”
Day says entering politics was one of two major mistakes he had made during his decades in business.
He said he was working with the liquidator to repay all debts.
“I built my first house in Adelaide in 1979,” Day’s email says.
“By 1990, Homestead was SA’s largest homebuilder and has been profitable every year since, for which I am very proud.
“But I made two big mistakes – one: Buying Huxley Homes and two: Going into politics without putting in place a proper management structure for the business.
“I will be working closely with the liquidator and offering a proposal to enable me to find a way to pay back every debt fully, no matter how long it takes.”
A statement from McGrathNicol, released today, says Home Australia has stopped building 207 homes that had been under construction around the country – including 48 in South Australia.
“Customers with homes under construction should contact the insurer per the insurance certificate which was issued with their home building contract,” the statement says.
“In cases where no insurance certificate has been issued, customers may have a claim against the relevant Home Australia entity which they contracted with.
“The liquidators’ immediate objective is to work constructively with relevant insurers and customers in an effort to facilitate the orderly recommencement of construction of uncompleted homes by alternative builders.”
The liquidator says it will contact customers in writing in coming days, and that the financial affairs of Home Australia were to be investigated.
SA Family First leader Dennis Hood said in a statement this afternoon: “Family First wishes to take this opportunity to thank Senator Bob Day for his service in the Federal Parliament, to the people of South Australia and to the Family First Party.”
Hood said the state executive of Family First would soon meet to nominate a candidate to replace Day in the Senate. That candidate must then be endorsed by the party’s federal executive before a joint sitting of the state parliament to formally endorse the candidate, after which she or he will be sworn in as a senator.
“We expect this process will take several weeks,” Hood said.
More to come.
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