The potential liquidation of a Sydney construction company could be one of the biggest in Australian history, a debt recovery expert has said, as tradies and buyers face being left thousands out of pocket.

Bathla, a construction group that focused on building affordable homes and apartment complex’s in Western Sydney, went into administration last week, holding debts of up to $3.6 billion.

The Bathla Group is on the cusp of being wound up. Brent Lewin

Administrators of the company have warned they could struggle to keep paying the company’s 350 staff – some of whom haven’t been paid in two months – admitting there may be no choice but to close the business.

Larry Kaine, managing partner at Corporate Recovery Partners, says the administration of Bathla is “unprecedented” in its size, warning the ripple effect could be significant.

“The magnitude of this administration is just so damn big. I mean, I’ve never seen anything like it,” he told nine.com.au.

“I don’t think we’ve had a collapse of this size, not just in dollar value… but the magnitude of this one where it’s so many projects, there’s so many lenders.

“This is will be Australia’s biggest administration, from what we have seen.”

Kaine’s company is organising a committee of inspection (COI), with expressions of interests being opened to unsecured creditors who could be adversely impacted by Bathla’s collapse.

Unsecured creditors could be tradies, subcontractors, consultants and homeowners, who are lower in the pecking order in terms of receiving compensation in the event of a business going into administration.

Kaine warns there could be thousands of people in this position, and that if Bathla is eventually liquidated, they will have little chance of recovering their lost money.

Bathla’s administration and potential collapse could have catastrophic impacts. Bathla

“A humble tradesman who’s owed $100,000 or a $1 million is essentially going to find himself into a position of insolvency in the knock on [period of] six to 12 to 24 months,” he claimed.

He cites a similar case from the UK, when Carillion, the second-largest construction firm in the country at the time, collapsed in 2018.

Bathla’s collapse could cause a $20 billion hit to the NSW economy. Sitthixay Ditthavong

The collapse left about 30,000 suppliers and small businesses owed more than £1 billion ($1.8 billion in 2026), which causing significant disruption and redundancies in the UK.

Bathla’s potential collapse could have a similar impact in Australia.

“The knock on effect is probably and conservatively going to be $20 billion on the broader New South Wales construction sector,” Kaine said, adding that would lead to “a $20 billion impact” on the New South Wales economy.

He said it could also cause problems across other parts of Australia, as tighter restrictions would make it harder for building projects to progress.

The best outcome for unsecured creditors, Kaine said, is for a deed of company arrangement (DOCA) to be made; this is an arrangement between a company and its creditors – including unsecured creditors – that binds them together, and increases the chances of the business being able to continue operation, or of creditors being able to recoup some of their assets.

Despite this, Kaine, whose business specialises in assisting creditors who have been impacted by closures in the construction industry, said Bathla’s collapse reflects the state of the sector in Australia.

“It’s really grim,” he said.

“Construction insolvencies are at all time highs… delinquencies or payment arrears, overdue days, that’s on the up.”

Administrator Teneo is attempting to negotiate a short-term funding arrangement that would allow staff to be paid wages they are owed.

The deadline for a rescue deal to be struck was extended by 24 hours to Thursday morning.