Tauranga building company Coast Homes Limited has gone into liquidation, owing a significant amount of money to the taxman.
The director of the company, property developer Stephen Short, told the Bay of Plenty Times today that he closed Coast Homes down a year ago after it had built all the houses it needed to.
"We ceased trading a year ago because it was bound to a restraint of trade at Coast Papamoa Beach development. So that had been sold out, there was no more land, so we couldn't build anymore."
He said Coast Homes had built about 50 houses over nine years at the Coast Papamoa Beach development.
"For our clients, the warranties for their houses will transfer, we'll look after all those sorts of things ... I don't want to leave anyone in the lurch."
Short said the company had worked very hard to put together a payment arrangement with the Inland Revenue Department to clear the debt, but that was declined.
"Because the company had ceased trading they weren't interested."
He said there were very few other creditors owed money.
"We've been working through it, there's not many at all ... There's about $200,000 in creditors which we've worked our way through as we closed it down. Which we pretty much will clear."
He said because the company stopped trading a year ago, it had no current clients, wasn't working with any tradies, and there were no unfinished houses.
"We've just been working through it and getting everyone happy. We just couldn't do a deal with the IRD."
Asked how much money was owed to the IRD, Short said: "I'd have to check with the accountants what the actual core debt was."
Asked if it could be as high as $1 million, he said: "It'll be close to that, yeah."
Short said the liquidation would have no knock-on effect to his other companies, developments or land projects.
"Not at all. We closed it down because of a restraint of trade and the legal advice we had was to shut it down, there's no point in trying to build outside of Tauranga or anywhere outside of Coast with the restraint of trade because we could be taken to task."
He said the company's intention was to square everybody away over time.
"We're just trying to do everything as well as what we possibly can. Unfortunately, the IRD wasn't willing to wait.
"We tried to do the right thing ... but we'll make sure that everything's tidied up as best it can."
Liquidators from PwC New Zealand were appointed to Coast Homes Limited on Monday morning by the High Court at Tauranga.
One of the liquidators, Wendy Somerville, told the Bay of Plenty Times that it was still very early days "and we are still very much gathering our information".
"So as per things like the number of creditors and the amount of debt and things like that … I just don't know that information as yet."
She said her team had spoken to the current accountant of the company and the solicitor who appeared in court.
The IRD was the applicant creditor, Somerville confirmed.
"We will just be working with the company director and his advisers over the next couple of weeks to gather all that ground information and try to establish what went wrong here."
The IRD said it legally could not comment on individual taxpayer's matters.