Clients of collapsed national builder Ebert Construction with defects in new buildings have not held enough money back in retentions to be able to cover repairs, the latest receivers' report shows.
In a six-monthly report from PwC's John Fisk, Lara Bennett and Richard Longman, a new group of victims has emerged, on top of the creditors claiming more than $45m.
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"A number of Ebert clients contacted us to notify ongoing defects in respect of the company's construction works. Some of these customers advised that the cost of
remedying the alleged defects will exceed the value of the retentions held against Ebert and they do not intend to release any funds. Given the complexities we have worked through these matters on a project by project basis," the receivers said.
Ebert was working on 15 projects last July when directors declared issues, 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.
Assets of $30.1m were identified, based on their book value. But outstanding debts and liabilities include $24.5m claimed by trade creditors, $9.3m in subcontractor retentions, $6m owed to the BNZ, $3.5m claimed by director Kevin Eric Hale, $349,000 owed to Inland Revenue, $1.2m owed to employees and unknown further amounts owed to creditors.
No money is available to pay.
"Based on the realisations achieved to date, it is unlikely that there will be any surplus funds available from the recoveries made during the receivership," the receivers said.
Ebert's receivers have 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.
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.