The liquidator of a Queenstown building company owing $1.5 million says he’ll be investigating the debt build-up of the failed firm.
Hartland Construction Limited, which held the local GJ Gardner franchise, was placed into liquidation at a watershed meeting last week.
Auckland-based insolvency expert Bryan Williams – who was originally appointed as administrator but has since become liquidator – told creditors he no longer recommended the alternative of the company going into voluntary administration in an effort to continue trading and pay unsecured creditors.
“The reason for this opinion is that it is unlikely that Hartland has the ability, in the current and near-term economic environment, to commercially perform in a manner that will produce a riskless outcome for the creditors at a level that
will justify their continued involvement,” Williams’ first report says.
Williams tells Mountain Scene: “It’s my belief that the creditors stand to have better potential for an outcome in investigating the governance of the company’s affairs than hoping for a dividend to be forthcoming from any future trading activity.”
Hartland Construction was run by Queenstown builder Marc Steenland and owned by Steenland, his wife and Steenland Trustees Limited.
Steenland held the GJ Gardner franchise till the master company terminated the agreement in January.
The Steenlands and the trust bought the company between April-July 2009 off Hartland’s incorporating shareholders Laurie Mains, Andrew Giles and Kelvin Middleditch, the Williams report says.
When Hartland was placed into voluntary administration this May, it was owed $312,989 and had tangible assets of $149,626. The firm owes about 80 unsecured creditors $1.5m.
In the 2009-10 financial year, the company had net income of $153,451. The following financial year, it made a loss of $347,285 and between March-November 2011 it suffered a further loss of $163,308, the report says.
“In this file unsecured creditors’ claims have increased from zero at the time the current shareholders acquired the shares from the incorporating shareholders to approximately $1.5m as at the commencement date of the administration – a period of less than three years,” Williams reports.
“It is the administrator’s opinion that such an event, and others, should be investigated by a liquidator.”