Corbel creditors owed more than $5m - liquidator's report

Collapsed construction firm Corbel owes creditors more than $5 million, according to the liquidator's first report.

Unsecured creditors are claiming $4.6 million from Corbel Construction, while secured creditors BNZ is owed $266,000 and two family trusts are owed $960,000.

Trade creditors have claimed $2.9m, subcontractors have claimed retentions of $1.5m and staff and directors $118,000.

Liquidator Andrew Oorschot, from Ashton Wheelans in Christchurch, said it was unclear whether all the outstanding money could be recovered from the firm.

Oorschot's report said there would be enough money to pay preferential creditors and the majority of secured creditors in full.

"However, the recovery of funds for the unsecured creditors is entirely dependent on the recovery of November progress claims issued to customers and retentions on previously completed projects and current projects with a combined book value of just over $2m," Oorschot wrote.

On the other side of the ledger, Corbel had assets with a book value of $4.9m, including $1m in November progress claims awaiting approval, $1m in customer retentions in dispute, $1.4m work in progress, its main bank account with $383,000 and a retentions trust bank account with $110,000.

Corbel sought adjudication for money outstanding on a major Auckland project and got an adverse and unexpected ruling, meaning its ability to recover money outstanding on that was called into question, Oorschot's report said.

So liquidation was called for.

Oorschot did not name it specifically but that project is Auckland's 81-unit Parnell Terraces, The Strand leaky building project at Quay Park where Corbel carried out major repairs and where owners' lawyer Jeanne Heatlie of Rainey Law, acting for the body corporate, confirmed financial issues.

Payment claims by Corbel were reviewed and deductions made from subsequent payment claims as a result of earlier over-certifications, Heatlie said. These deductions resulted in adjudication proceedings because Corbel believed the payments were justified, she said.

"That was not the case. The end result was that Corbel owed the body corporate in excess of $500,000," she said.

Corbel is owned by Christchurch's Craig Jones and Jane Madison-Jones, Mark and Rachel Wells, Nigel and Phillipa Babbage and Hereford Trustees (2007).

No creditors' meeting is proposed.