An ill-fated acquisition 13 years ago of NSW home builder Huxley Homes, a management structure which led to a string of complaints over quality, and some hefty donations from his private interests to the Family First party brought the house of Day down.
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Insolvency firm McGrath Nicol on Monday afternoon was desperately seeking other builders to take over the construction of 207 houses around Australia in various stages of completion under the five different banners in which Senator Bob Day's home building empire traded.
Huxley Homes has 56 houses currently under construction, and it is this business which has drawn the ire of many customers and the NSW Office of Fair Trading which has doled out fines for Huxley failing to comply with rectification orders.
But problems appeared soon after the 2003 purchase of what was then a Parramatta-based business, industry sources told The Australian Financial Review on Monday.
"It did go downhill at a rate of knots but it was a really good organisation when run by the Huxley brothers," one NSW building industry veteran said. "It's happened across the building industry. You can look at all the companies taken over that were run by a family. An outsider comes in, takes over, the family disappears and the business goes down the tube. The industry is littered with it."
McGrath Nicol was formally appointed on Monday as liquidators of all five companies after a last-ditch attempt by Senator Day to find a saviour in property developer Goshen Capital Resources from the Philippines fell through. Under the rescue plan, Goshen was to buy 75 per cent of the Home Australia company which is the parent of the five State-based brands and inject enough cash to keep the business going and to trade out of its difficulties.
Victor Dominello, NSW minister for innovation and better regulation, said the state's Office of Fair Trading had at all times held the business accountable for its behaviour.
"As late as last Thursday, the company submitted an application to renew its building licence, and had given no indication of the impending liquidation," Mr Dominello said late on Monday.
There were more than $100 million in forward orders across the Home Australia operations.
Senator Day himself blamed the Huxley purchase and a failure to put in the right management structure for the strife which came to a head with the appointment of McGrath Nicol's Matthew Caddy and Barry Kogan on Monday.
In a statement where he outlined how sorry he was for the "pain, stress and suffering I know this will cause", Senator Day was blunt.
"I made two big mistakes - buying Huxley Homes and going into politics without putting in place a proper management structure for the business," he said on Monday.
The industry veteran agreed.
"As soon as it was taken over, it appeared from the outside that the systems that were used in SA for Homestead Homes were superimposed on the Huxley organisation," he said. "It seemed to become very bureaucratic. Within months it had stopped selling the way it had been selling previously. There were on-site problems. Construction times blew out."
In an interview with the Financial Review in early 2014, Senator Day pledged to sell out of his home building empire, but that ultimately didn't occur. He said on Monday that since 2015 he had been assessing proposals from a range of parties to recapitalise the Home Australia operations. Those proposals had been from local, national and international groups, and the Goshen proposal had been chosen. But creditor payment plans and other commitments were left in tatters when the funds didn't arrive.
"The funds to invest in Home Australia should have been transferred last week but each day there was a different excuse," Senator Day said.
The original centrepiece of Senator Day's empire, Homestead Homes in Adelaide which has 48 houses under construction currently is among the businesses to be sold off if buyers can be found. Ashford Homes in Victoria has 57 homes under construction, while in Western Australia there are 29 homes in the Collier Homes business that are partially completed.
Newstart Homes is the Queensland arm of Home Australia and has 17 homes under construction.
