National builder Ebert Construction has creditor claims of more than $45 million but assets of only $30.1m, according to the latest report, which predicts there will be no money for unsecured trade creditors.
John Fisk, Richard Longman and Lara Bennett of PwC have now released their six-monthly receivers' report on the company, also in liquidation.
Ebert was working on 15 projects last July when directors called it a day, bringing to a halt construction of the huge Union Green apartments in Auckland - now being finished by Dominion Constructors - as well as many other projects by the firm which specialised in apartments and dairy processing plants.
The receivers said unsecured Ebert creditors were owed $33.8m at the time of the receivership and any payout was unlikely.
"The company's accounting records as at July 31, 2018 reported unsecured trade creditors of $33.84m comprising accounts payable ($24.52m including GST) and retentions ($8.32m excluding GST).
Based on the information to date, the report said it is "unlikely" there will be any surplus funds available.
The $45m-plus owed to creditors includes BNZ's $6m, director Kelvin Eric Hale's $3.5m, trade creditors' $24.5m, subcontractors' $9.3m via retentions and employees' $1.2m.
Those debts overwhelm key assets which include $18.6m contract receivables, $4.8m client retentions, $3.6m cash and $2.4m income tax.
Worse, clients had been complaining about Ebert's work.
"A number of Ebert clients have contracted us to notify of ongoing defects in respect of the company's construction works. Some of these customers have advised the cost of remedying the alleged defects will exceed the value of the retentions held against Ebert and as such, they do not intend to release any funds," the receivers said.
Getting money in has been hard.
"In many instances, resolution of outstanding receivables has been a complex and lengthy exercise due to the nature and status of the physical contract works, detailed documentation required and guarantee/warranty issues outstanding and developing during our appointment. We have pursued formal recovery action where appropriate," the receivers said.
The construction industry has been dogged by issues lately including:
• Mainzeal went under in 2013 with losses of more than $110m;
• Fletcher Construction last year said it was leaving high-rise building after losses of nearly $1b;
• Trouble arose at Alexandra Park where Canam last year left one of two big apartment blocks, replaced by CMP Construction;
• Christchurch-headquartered Corbell Construction went into liquidation in December, with $35m of projects underway;
• Arrow International went into voluntary administration in February after a contractual dispute left it with insufficient cash flow to meet operating costs;
• Fletcher work on the $703m NZ International Convention Centre and the $1b Commercial Bay is delayed, resulting in the developers withholding millions.
Ebert's receivers said the company had two principal areas of operation: construction of processing facilities mainly for the dairy sector and general commercial building including multi-unit or apartment blocks.
The dairy factory work had been performing well for years but Ebert had "significant actual and anticipated losses relating to a small number of poorly performing general construction contracts."
That meant its ongoing ability to trade was hit and the directors called in the receivers on July 31.
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On October 3, liquidators from Grant Thornton were appointed but they were replaced in November by BDO Wellington. The PwC receivers said they were now working with the BDO liquidators.
The receivers said Ebert had "74 specific security financing statements" registered against it and they had provided the liquidators with details of all claims filed.
Ebert leased most of the significant construction plant and equipment on its sites from either a related entity or from third parties, the receivers said.
In the last six months, the receivers had been paying all known preferential creditor claims, negotiating with customers or principals, disposing of fixed assets, making insurance and other claims, answering creditor questions, assessing and trying to reach resolutions with creditors claiming a security interest, liaising with liquidators and preserving and securing physical and electronic books and records.