The Fallout: How far would you go to save the life you've built

By Mark Doldissen

In the post-COVID economy, rising inflation and interest rates have seen the Sydney apartment market crash. Billionaire property developer Nicholas Rutherford's Millennium Developments has been placed in voluntary administration, leaving clients, investors, creditors and subcontractors in financial ruin.

Small business owner Jack Baker an

• Language: English
• Publisher: Mr Mark Doldissen
• Release date: Mar 8, 2023
• ISBN: 9780645756708

Mark Doldissen

Mark Doldissen is a debut novelist with his first book The Fallout available now.With a 25 year career in Sales and Marketing to the construction industry, he's drawn on his intimate knowledge and experience in the business to make it as realistic as possible.Whilst fiction, the novel's scenario and storyline are utterly plausible given the current economic situation.The novel took over 5 years of part time work to put together. The original edit was by Marion Lucy for Aurora House, before several reworks including a complete rewrite in the first person, with the full structural and line edit completed by Kat Betts at Element Editing Services. Mark is now in the mortgage business and lives in Sydney with his wife, Jacki.

Book preview

1

Wednesday

Our darkened bedroom glowed as the all too familiar alarm tune on my mobile broke the silence. My brain startled into action as I scrambled to hit snooze on the bright screen. A reprieve of nearly nine minutes, but I knew I’d be up before it went off again. My mind processed the time and, like Groundhog Day, it was 5 am. The air was cold, and I was warm under the covers, but if I lay in bed I’d start to stress over the traffic. Easier to just get up and get on the road. You would have thought there’d be no one on the road with the last outbreak of the highly contagious, vaccine-resistant mutation of the virus having taken its toll, and runaway inflation and interest rate rises having battered the economy. Every day there seemed to be another announcement of a business shedding staff or going broke. One mass lay-off after another. For those who still had to commute to work, private vehicles seemed to be the preferred mode of transport. People had become paranoid and public transport was almost deserted. Those who could were working from home but I, like many, did not have that option.

For me, Jack Baker, there was no indication this Wednesday morning would be any different to my usual workday routine; an early start in the dark while the family slept, into the work gear, long black in a travel mug, on the road before six to beat the worst of the traffic, then the endless mind-numbing grind on the M5 Motorway, from the semirural town of Camden to the building sites in the city of Sydney. Not exactly what I dreamed of as a kid, but hey, not many people actually managed that.

Things weren’t always this way. I’d built a nice little business doing metal fabrication in the local area, but the housing boom brought a huge demand for skilled trades to the inner city, and like so many others sharing the motorway, I chased the dream of business growth, and the money that went with it. What people don’t see is the unpaid hours of ever-increasing commutes eroding your lifestyle and leisure time. The odd after-school pick-up or attending kids’ sport training were small highlights of my day, but increasingly rare these days. The long, sedentary days had an adverse effect on my physique. For a former local sports star, the ensuite mirror betrayed my nostalgic memories whenever I emerged from the shower. The ripped muscles of my six-foot-tall, once-athletic body turned to flab, victim to the freeway crawl and the junk food curse of the service station convenience stores. My once thick, dark hair, thinning and receding, with seemingly more flecks of grey by the day, was unfortunately an occupational hazard of the business.

Still, turnover had more than doubled and I’d put more staff on to cope with the workload, primarily generated by our major client, Millennium Developments. I’d ridden their rise from small-time eastern suburbs builder to Sydney’s mega apartment developer. The flip side was constantly having to drop my prices on quotes, and more importantly, actually getting paid, the latter becoming increasingly concerning given the recent economic conditions. It wasn’t just me though, all the boys at the pub were in the same boat, their stories all similar. Late payments, short payments, the signs were ominous. I longed for the days when the work was the hard part of the business, not trying to extract money from your clients.

So far, my late spring morning journey had seemed relatively uneventful. The darkness had given way to the sun rising in the east, the glare creating an extra challenge for me and the other city-bound commuters. There was something about the motorway that turned everyday people into road warriors. The things some drivers would do never ceased to amaze me. The lane changers and tailgaters made the trip nerve-wracking at times, and you had to keep a cool head. I tended to stick to the middle lane to avoid the cowboys that treated it like a racetrack. Many times I’d been stuck, crawling along due to an accident. It always gave me chills as I passed the scene, paramedics attending to the injured, police investigating the cause and tow trucks removing the crumpled wrecks.

All those hours on the road gave you a lot of time to think, and of late, there’d been a lot on my mind. I checked myself in the rear-view mirror; no wonder I was going grey. With the unpaid invoices mounting, and the corresponding rise in our overdraft, there’d been a bit of tension at home. I’d been assured of payments and hoped this was just a short-term cash-flow crunch. That’s what I was telling my wife, Beth, anyway. She’d seemed to be buying it for now, but I could tell she had her doubts. Still, if they came good with the big one I was promised this week, that would give some reprieve and tide us over to next month.

Over time, the radio became like a good friend, helping to keep my sanity during the four to five hours in the car each day. You’d spend more hours in a day listening to the talkback hosts than your wife, provided you weren’t bombarded with calls detailing the latest crisis on site, which was a more-than-regular occurrence. Today, as always, I listened intently to the news bulletins, a welcome distraction from the mundanity of my situation, even if most of the stories seemed to be economic woes.

Australia’s unemployment rate is predicted to hit ten per cent today as the recession continues to worsen.

I cringe at the announcement. It had been getting worse every month, but this was unprecedented.

The four major banks have reported a sharp rise in the number of borrowers in mortgage arrears, as those who were locked in on low fixed term rates have been burdened with large repayment increases.

This was always going to happen when everyone had banked on low rates being the new normal, but it was scary to think what would happen to the market with a flood of forced sales.

And in breaking news, the company of high-profile, Sydney billionaire Nicholas Rutherford, Millennium Developments, has been placed in voluntary administration.

The words came like a jolt to my chest.

All assets have been frozen with an announcement by the administrator expected later this morning.

My body was shaking, my heart pounding and my mind racing a million miles an hour. The traffic ahead slowed abruptly, and I hit the brakes hard. With no weight in the back, my ute skidded, and my gear thumped into the back of the cab as I narrowly avoided a collision with the car in front. My concentration had waivered. I had to get out of the vehicle, and fast, but in this subterranean clog of vehicles, there was nowhere to stop.

Why did I take their assurances his bills would get paid?

Why did I keep working for him?

Why did I let one client become so integral to my business?

Why, why, why?

My hands were clammy on the steering wheel, beads of sweat started to appear on my forehead. Just concentrate, I told myself. Only about five minutes to a garage to stop and regroup. One point six million dollars credit given to that scum of the earth. Why?

I couldn’t take a hit of this magnitude to the bottom line. Surely, I’d seen this coming, with the payments being dragged out more and more. I let myself get into this mess, deeper and deeper, and now I could see no way out.

My business, my house, my marriage. Had I lost it all?

I maintained some sort of composure, past the airport and through the tunnel under the main runway. The service centre, coming into view on the left, could not have come soon enough and, somehow, I managed to swing into a car space and stop. Just breathe, I told myself, as I shut my eyes. The thumping heartbeat resonated throughout every fibre of my being, coupled with a foggy haze that descended through my brain as I tried to process more thoughts than was humanly imaginable.

I wanted to call my wife, my soul mate, Beth, for some sort of guidance. Always calm in a storm, she helped me through when things went bad, but at that moment in time, I lacked the composure required to speak to her. I would have ended up losing it, and that would have just upset her more than she was going to be anyway. No, that would have to wait until my emotional state subsided, until I was thinking clearly again.

I opened the door and got out, slightly unsteady on my feet as I stood up. The air seemed thick, or thicker than the normal polluted scent. Maybe I was just light-headed, so I focused on deep breaths. I left my ute and, desperate for some coffee, walked to the adjoining McDonald’s and ordered a double-shot flat white, my hands still visibly shaking when I paid the girl for it. They gave me a number, and I walked away, slumped in a chair and waited for it. Pulling out the mobile, I quickly went to a news site and there it was. Somehow it seemed more realistic as I read the words in bold type on the screen.

Sydney’s largest privately owned apartment developer has collapsed leaving creditors with debts in excess of $1.2 billion and off-the-plan purchasers with an uncertain future.

My mind was still trying to process all the information—the sort of stuff you read or hear but barely notice when it’s not your money involved. The stuff you think can never happen to you because you’re too smart, too savvy to get caught up in any of that. How did it all go so wrong?

The company has blamed the surge in inflation, interest rate rises and the economic effects from COVID-19, particularly the lack of immigration, for the slump in new apartment demand and prices as the primary reasons for the collapse.

I couldn’t foresee the virus, but I should have seen the writing on the wall. The madness of the never-ending building boom. Year after year of unsustainable price rises and indebtedness, then sent into hyperdrive as buyers scrambled to upgrade during the pandemic. All the warnings from the economists. It had to pop at some point. Though no one would have picked that the supply chain hangover from a pandemic and a war in Ukraine would be the catalyst for it.

Recent lockdowns and the rise in work from home has further reduced demand for high-density apartments.

Totally understandable given people’s need to socially distance, so waiting for a vacant lift and breathing the common air of a thousand residents was wearing thin. The dream city apartment suddenly wasn’t looking so good once you had to spend every day within its confines.

Chairman and owner of the company Nicholas Rutherford has offered his deepest sympathies to clients and creditors and has pledged to minimise their financial loss.

I could just picture the bastard, gloating over how smart he was, without any thought for the hundreds, if not thousands, he owed money to. My guess was that he would have followed in the footsteps of the rogue Australian businessmen of the 1980s and shifted it all into the wife’s name and offshore accounts. Bond, Skase, and all the others. It was a procession back then. All thought times couldn’t go bad, but they did, in a big way. History has a habit of repeating itself.

Number eighty-six, your coffee is ready, the call came for the second time. I was numb, oblivious to anything but the screen in front of me, and the myriad of thoughts racing through my head.

Sir, the girl at the counter called out. I looked up and apologised, as I hastily made my way to her, desperate to get that much-needed caffeine hit.

I resumed my seat, cup in hand, and mentally replayed that first meeting with Nick. He had an air of superiority, the silver spoon type, a founder’s son, with an elite eastern suburbs private school education—the polar opposite of my upbringing. He constantly bragged about the thousands of apartments he was building each year, and how he took his father’s company from a small-time building company to one of the country’s largest players in the market. He spoke with disdain and contempt for his suppliers and subcontractors, saying how they should consider themselves lucky to be working on his projects and should put up with any terms and conditions he saw fit to impose on them. Now times were tough for business he, like many others, just drew up the drawbridge and secured his castle, leaving me and many others to fend for themselves.

How the hell did it end up like this? My small metal fabrication business had been plodding along just fine. It was never going to make us rich, but it made enough to give my family a good lifestyle, without me having a heart attack. But human nature being what it is, I thought I could take on more, earn more for myself and my family.

It was my tiler mate, John from the local pub, who was swamped with work for Millennium and suggested a meeting. John gave me the contact of the site manager on one of the city jobs he was working on, so I went out to meet him. After some protracted negotiations, mainly about money, we eventually picked up that job, then another and another, and on and on it went. Screwed on price and always waiting for payment seemed to be their treatment of subcontractors. As a result, the work on site was often shoddy with some tradies cutting corners as a last resort to make any money out of the job. Leaking pipes, cracks in the concrete, gaps around the windows, tiles falling off, you name it, the defects lists were massive. Nicholas just paid his private certifiers to sign off and he was in the clear, leaving the body corporate to fight it out once the owners had moved in. Sometimes they got it fixed, sometimes not. Worst case they had to move out while they did structural repairs, which rendered the apartments impossible to sell in the future and the owners facing financial ruin. But somehow, he just kept building. Project after project, he always managed to have a new one on the go, usually right near some newly announced transport infrastructure, as if he had a sixth sense, or some inside information, most probably the latter.

Every pre-award meeting was the same. They’d tell you how happy they were with you on the last job, then dangle the carrot of the next big project they had coming up. If you just looked after them on this job, you’d make it up on the next one. This job was really tight, but the next one had more in the budget. It would not be so price sensitive, so they would not push you so hard on the price. But it never played out that way, their hollow promises quickly forgotten, every time just like the last, and now this!

Maybe the creditors would get something, but you’d seen it all before and, deep down, knew it was highly unlikely. It would drag out for a year of pointless meetings, then everyone would walk away with one cent in the dollar! Next minute you’d hear they’ve started up another company to do it all again. Same directors, different company name. How can that happen? It seemed the regulators were powerless to stop them.

I had to ring Beth, but what was I going to say? Hi honey, I’ve just lost the business, our house and all our money but don’t worry, we’ll get through it. Somehow that wasn’t going to cut it.

Suddenly, my phone rang and Beth flashed up on the screen. Damn, she’s heard the news, let it go or answer it? I was never one to shirk the hard things in life, and God knows we’d found our way through our fair share of challenges in life. This couldn’t be worse – or could it? Steeling my nerves, I took a deep breath and touched the green accept icon on my iPhone.

Beth.

Tell me it’s not true, Jack. Tell me it’s just a bad dream, just tell me anything that will help, she replied, her voice quavering.

We’ll get through this, honey, we always have.

But we’ve always had our house, the business and a little money to get us through.

It’ll be okay. I’ve only just heard it too and I haven’t formulated a plan yet.

A plan! What the fuck, Jack? The only plan I can see is bankruptcy and selling all our stuff on eBay!

Come on, Beth.

Well what do you expect me to say? Why the hell did you ever get involved with that trumped-up, snake-oil salesman?

We’ve been through this a hundred times, it was a lot of volume for us, it helped us expand to where we are today.

Yeah, a bigger business who just lost their major client and all their payments with them.

I’m going to call Todd, then go and see him today. Todd Brown was my long-term accountant and old schoolmate who always had an angle on things. He’d helped us out of some sticky situations before, but this would require the work of a magician.

Well, I hope he can pull a rabbit out of the hat, because otherwise we’re stuffed!

I knew how dire things were, but she was the love of my life and just couldn’t bear to upset her any more. We’d been through more than enough and this was just the final straw.

He’s never let us down before, so let me go and I’ll call him now. See you this afternoon.

Just make this all go away, I don’t care how you do it, just make it go away! she pleaded, audibly shaken.

As she hung up, I shut my eyes and told myself to focus. I found Todd’s number in my contact list and made the call. He worked office hours and would probably still be at home getting ready.

I’ve just seen the news, Jack, what the hell! The media have staked out his house but no sign of him yet. Tell me they made those payments they promised you before this happened!

If they did, would I be ringing you this early?

Oh, Jack, you poor bastard, where are you?

The Maccas near the airport. I swear I nearly ran off the road.

What’s the current damage?

One point six million, give or take. There was an exhale of breath and a slight pause on the other end of the line before he replied.

Have you got your latest financials on your laptop with you?

Always. I was a stickler for figures and being up to date with paperwork.

Email me the latest and be in my office by 10 am and we’ll try to sort this fucking mess out, and don’t do anything stupid!

Todd!

I mean it, Jack, people do some dumb things when stuff like this happens.

I’m fine, I lied.

I mean it, Jack, you’ve got Beth and the kids.

I know.

So nothing stupid, alright?

Okay, okay, I get it!

Okay, so I’ll see you here at ten.

See you then.

After the conversation, I made my way to the restrooms as I replayed it in my head. When I looked in the mirror, all I could see there was a broken man, full of regret and remorse for what I’d inadvertently done to my family. When I last looked in the mirror, just a couple of hours ago, there was hope, ambition, something. How did this happen in such a short time? I splashed some water on my face, dried my hands and trudged back to the car, full of concern not only for myself, but for others caught in the same trap, other families in the same position. This conversation was going on between many victims right now. Couples, families, business partners and company directors, there would be many who were collateral damage. It made me sick to the stomach.

As I drove out of the car park, my mood had started to change. I’d already gone from disbelief to anger, now darker thoughts of revenge had started. As much as I tried to fight them, they kept nagging away. My thoughts turned to Dad’s old shotgun that I still had in the shed—how I could stake out Nicholas’s house and take him out like some kind of mafia hit. Lord knows, I wouldn’t be the only one around contemplating that, certainly some of the concreters I’d met on site wouldn’t think twice about it if they were owed that much. But what would that prove? It wouldn’t make one iota of difference to my family’s life, and probably just hand Nick’s family a multimillion-dollar life-insurance payout. No, that was just pointless.

I remembered the high-profile Whelan family case which involved a kidnapping plot. The husband was prominent in the equipment business and his wife was snatched from a hotel car park in Parramatta by a disgruntled former employee. The whole grisly case ended up in a murder and Burrell, the perpetrator, was convicted and sent to jail after police found her body on a property outside Goulburn. What was the sense in that, other than revenge for some workplace confrontation with his former boss? I imagined that even if I took Nicholas’s wife for ransom, the vain prick probably wouldn’t pay for her return anyway. Then there were visions of some Getty-style kidnapping plot with a family member held for ransom, but I couldn’t bear the thought of doing that to one of his kids. No, I found all these bizarre ideas abhorrent, and again tried to stop these dark, disturbing images morphing in my brain like some insidious disease. Then, all I thought of were Todd’s words, nothing stupid, which brought me back with a reality check.

As I looped around the airport to resume the freeway journey, albeit in the opposite direction, I caught a glimpse of one the apartment towers, the gleaming new glass structure, architecturally hideous, Millennium banners flapping in the breeze. This gargantuan edifice standing almost defiantly as if to say, I’ll survive this regardless of what happens to you. Personally, I viewed it as a symbol of everything that was wrong with modern society. It had been a small site where four houses stood with four families going about their lives, just like my childhood in suburban Sydney on a quarter-acre block. The only units around then were three-storey walk-ups, but all my mates lived in houses, playing backyard cricket instead of sitting on the lounge playing it on a screen. Now through rezoning and town planning changes, those four blocks had been transformed into more than a hundred units stretching twenty-five storeys into the sky, all using the same roads and services. No wonder I spent five hours a day commuting.

I entered the M5 tunnel and channel surfed around the news stations to try to think of something else. A minute later shock jock Johnno Johnson, came booming down the airwaves.

"Well listeners, it’s a sad day today—one of our great Australians, Nicholas Rutherford, has been forced to put his family company, Millennium Developments, into voluntary administration." You don’t know the half of it, buddy!

I’ve known Nicholas for many years. He’s a good family man and honest businessman. I know his thoughts and prayers would be with anyone who has been caused financial hardship by these events. At this point I thought I’d actually be sick listening to this.

I have advertised his properties on this show, and we always do our best to ensure the sponsors we promote are beyond reproach, but no one could have foreseen these events. Yeah, except if you had opened your eyes and ears to see and hear what was glaringly obvious to all and sundry, and it wouldn’t be the first time you’ve promoted a business that sent their clients broke.

He battled with the building unions for many years and came out victorious. Always a political point, the bastard was making him out as some sort of hero of the conservatives, when in reality he was just a crook.

He took on the Greenies and Tree Huggers and turned some swampy river sites into beautiful state-of-the-art apartment developments. A favour from his lackeys in the Land and Environment Court – seems everyone was getting paid off.

When the new Labor government came in with their higher interest rates, the market was doomed, and now it’s taken down one of our great companies. Wow, this was a case of spin doctoring on steroids! Worldwide inflation driven by supply chain issues and a war had fuelled global interest rate rises, and left Australia’s highly leveraged property market in tatters. As if a new government had anything to do with the mismanagement of one of Australia’s biggest developers. I’d seen pictures of Nicholas with Johnno, schmoozing the city’s movers and shakers at every social soiree they could get to. Power and influence