The first liquidators' report is out for Coast Homes Limited, a Tauranga company that is said to have built about 50 houses over nine years at a housing development in Pāpāmoa Beach. Reporter Scott Yeoman looks at how much the recently collapsed company now owes, according to the liquidators, and talks to some of the local businesses that say they have been left out-of-pocket as a result. And, as he discovers, the liquidators say it is "extremely unlikely" that the unsecured, non-preferential creditors will get their money back.
Tauranga property development company Coast Homes Limited owes more than $2 million to creditors, according to the first liquidators' report.
The Inland Revenue Department (IRD) is altogether claiming about $1.5 million of that – $923,057 of which is a preferential claim for core unpaid tax.
The remaining portion of the IRD's total claim falls under the $831,362 owed by Coast Homes to unsecured, non-preferential creditors, several of which are Bay of Plenty businesses.
The liquidators of Coast Homes are Wendy Somerville and Malcolm Hollis from PwC New Zealand.
In their first report, released this week, Somerville and Hollis said it was "extremely unlikely" that the unsecured, non-preferential creditors would get the money owed.
There is also a $246,080 claim from the Bank of New Zealand, a secured creditor, which will likely be partly recovered by selling a Range Rover, as well as any other assets pledged to them.
Meanwhile, the liquidators have got their eye on three related-party loans, which they are trying to recover, to pay, in the first instance, the core tax owed to the IRD.
"At the date of liquidation the company assets comprised of three related-party loans," the report said.
"We have issued statutory demands for repayment of said loans and are currently considering a settlement offer."
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Somerville told the Bay of Plenty Times that those were not one-off loans, but rather a series of transactions that totalled an amount. She wouldn't provide a figure for the loans.
She said over the past couple of years there had been a number of transactions between Coast Homes and related-party companies, which she said was "not unusual".
"A lot of people operate between different companies like that."
Somerville said Coast Homes' director, Stephen Short, had met the liquidators and they were in discussions with him about settling the debt owed by the related-party companies.
The liquidators also said in the report that they had been advised that the primary reason for Coast Homes' insolvency was a delay with certificate/s of title being issued, "which caused cashflow difficulties and an inability to meet tax obligations".
Coast Homes was put into liquidation on September 9 by the High Court at Tauranga, with Short the sole director of the company and Velcro Investments Limited the sole shareholder (an entity owned and directed by Short).
The company was incorporated in March 2009.
The liquidators' report said Coast Homes operated as a property development business in the coastal region of Tauranga and ceased trading in May 2019. It said the company had no employees at the date of liquidation.
When the Bay of Plenty Times approached Short for comment this week, he said: "The liquidators' first report is due just 25 working days after liquidation; often before verification of debts, clarifications and reconciliations can be attended to, which can lead to the overstating of the company debt. That is the case here."
Short said he attended an interview with the liquidators and had co-operated fully with their investigations.
"I anticipate the commercial settlement with the liquidator to be concluded by COB (Close of Business) Friday and the vast majority of my creditors are covered by personal guarantees, which I will honour."
One of the Tauranga companies on the unsecured creditors' list is Celcrete International Limited.
Stuart Buchanan was the owner of Celcrete International, which dealt in lightweight cladding systems. He sold the company a few months ago.
Buchanan said Coast Homes owed his company more than $17,400 for two invoices from late last year.
Celcrete International did work with Coast Homes for about five years.
"Normally it's a sign. When they're paying late, it's a sign they're going down," Buchanan said.
The Bay of Plenty Times has seen an email exchange between January and March this year where Celcrete is asking Coast Homes to pay certain invoices.
A current staff member at Celcrete confirmed this week that the company was still owed more $17,400 by Coast Homes.
"Normally when this happens, you're not the only cab on the block," Buchanan said.
There are four Tauranga companies and one Rotorua company on the unsecured creditors' list, as well as three others from Auckland, and the IRD and Ministry of Justice from Wellington.
There are also four Tauranga companies on the secured creditors' list, along with the Bank of New Zealand in Auckland.
Scaffold Systems Ltd, based in Tauriko, is one of the unsecured Tauranga companies.
Blake Wilson, whose family owns the business, said Coast Homes owed the company about $26,000.
He said Scaffold Systems' managing director, Katrina Wilson, had repeatedly asked Coast Homes for the money.
Blake Wilson said having that amount of money owing had a "huge" impact on their small, family-run business, which had 15 staff.
"Especially when we've paid the labour and all the costs that are associated with installing scaffolding."
•Bank of New Zealand (secured) – $246,080
•Inland Revenue Department, core unpaid tax (preferential) – $923,057
•Unsecured, non-preferential creditors – $831,362