A Queenstown building company’s gone under owing, allegedly, more than $1.2 million.
Fowler Homes Southern Lakes Ltd licensee and sole director John Mansfield put the company into voluntary liquidation last Friday afternoon.
That came about 24 hours after Mansfield told the Otago Daily Times he hadn’t liquidated and the “rumour mill” was “obviously in overdrive”.
He did, however, admit business had been “a bit unstable”.
“You see it often when it gets really busy. That’s when it happens – not when it’s quiet.”
The first report from liquidators Colin Gower, of BDO Christchurch, and Tim Ward, of BDO Invercargill, is due out tomorrow.
Fowler Homes New Zealand boss Tony Hill says 10 homes were being built by Mansfield’s company – as of Friday all but one had been reassigned to a local builder, or “reached practical completion”.
Hill tells Mountain Scene he understands Mansfield’s been “working closely this week with his advisors in Queenstown”.
“We have been unable to establish a dialogue with BDO to understand the processes they are putting in place and resources at their disposal.
“With FHSL being an independently-owned business, we do not have access to their records.
“We remain committed to working with BDO to achieve best outcomes,” he says.
Hill’s been told by Mansfield the liquidation’s a result of “a number of client debtors defaulting on payments, which has led to a financial situation that is no longer tenable or sustainable for the owner”, Hill says.
A source, who asked not to be named, alleges Mansfield took progression payments for homes, but didn’t do the work and hadn’t done repairs on faulty workmanship for homes he’d completed.
It’s understood one creditor’s owed about $300,000 and another is $130,000 out of pocket.
The insider’s $25,000 in the red and was waiting for repairs to be done to a property.
“Workers weren’t turning up to do the work, so we’d find them and ask them and they’d say ‘we never got paid for the last job’, so people just stopped working for him.
“He ordered the tiles, for example, they arrived in town some months ago … We rang the tile shop and they said ‘he’s never paid for them’.
“It’s pretty bad for Queenstown.
“They were quite a big player here.
“It’s going to hurt a lot of people, especially all the subbies.”
It’s the second resort building collapse in recent years – True Line Builders Ltd director Jaden Melgren put that company into liquidation in July 2017.
The most recent liquidator’s report, from last September, says creditor claims totalled $793,215.47.
Liquidator Imran Kamal says it fell behind with creditors’ payments and the Inland Revenue, was on stop-credit with suppliers and subbies, had high overheads and well-paid staff who were “not performing”.
Kamal, however, has concerns about the way Melgren conducted business, which may be in breach of the Companies Act 1993, and the “substantial loss” suffered by creditors.