Blanchet Ltd, the fashion company of former Dunedin designer Nicholas Blanchet, who placed the company in liquidation last month, owed creditors more than $780,000 at the time it ceased trading.
According to the liquidator's first report the estimated loss, after asset sales, for secured and unsecured creditors stands at $438,000.
John Whittfield,of Auckland insolvency firm McDonald Vague, said yesterday he was unable to confirm what the final pay-out to creditors might be because stock was still being sold, but the report said it "appears unlikely" there would be any funds available for unsecured creditors.
Blanchet told the liquidators the reason for the company's failure was due to opening a flagship store in the Chancery, Auckland. The new store led to higher overheads, which could not be carried without additional capital investment.
The National Bank, a secured creditor, is owed $55,000, while debt factoring company Commercial Factors is owed $244,000.
Whittfield said $282,000 was available from debts owed to the company. He said Commercial Factors should be able to retrieve all its money, but would have to collect the money itself, some of it in Australia.
Preferential creditors have claims on wages and holiday pay for $24,263 and $68,628 to the IRD for GST, PAYE and student loans.
Unsecured creditors, including at least six textile companies, are owed $415,632, with nearly another $30,000 owed in redundancy payments.
The first report places a book value of $268,500 on assets including $200,000 on fashion stock, some of which is still being sold through Blanchet's Auckland shop.
The liquidator's estimate of the overall asset sales is $64,700, but Whittfield said negotiations were still in progress for the sale of a block of fashion stock.
He said the first payment of any surplus would go toward the $24,263 owed in wages and holiday pay, then the IRD debt and thirdly to the National Bank, but he noted some funds could come separately from the sale of fixtures and fittings.
