The failure of the Otago franchise of Signature Homes appears
set to leave more than 150 unsecured, mainly Otago business
creditors out of pocket, with total debts to all creditors
estimated at $1.3 million so far.
Eleven days ago, Mulwil Construction Ltd, the Signature Homes
franchisee in Otago since 2007, was placed into voluntary
liquidation by its managing director, Murray Wilson, claiming
at the time an outstanding $160,000 debt of one client had
tipped the balance.
Liquidator Hudson Biggs for Keogh McCormack and Trevor Laing
and Associates in Dunedin, said in his first report he could
not yet accurately predict the prospect of a dividend to
unsecured creditors.
However, information to date indicated "it is unlikely that a
dividend will be available to unsecured creditors", Mr Biggs
said.
The more than two-page list of creditors includes builders,
designers, scaffolders, contractors and joinery shops through
to a florist, moteliers and cleaners, with the liquidators
estimating up to $1.3 million may be owed to the ANZ National
bank, six secured creditors and the more than 150 unsecured
creditors.
After going into liquidation, Mr Wilson predicted he "could
easily see" other companies in the industry placed in
receivership or liquidation following Mulwil's liquidation.
A previous and unrelated Otago franchise holder of the
Signature Homes brand placed his company in liquidation in
2005, at the time owing an estimated more than $1 million to
creditors.
Mr Biggs said Mulwil's Signature Home show home at St James
Place in Fairfield in Dunedin, the company's largest asset,
had a rateable value of $535,000. However, he noted a number
of creditors had "priority claims" to the show home and two
vehicles, the latter estimated to be worth $20,000.
"The liquidators are not optimistic, given the residential
property market, a surplus will be created for unsecured
creditors via the sale of this [Fairfield] property," Mr
Biggs said.
There was understood to be up to 10 uncompleted Signature
homes around Otago and Southland, and Signature Home's parent
company has said it was confident they would all be completed
under guarantee.
Several home owners have contacted the Otago Daily
Times since the liquidation was announced, unhappy with
the work and cost to date of their homes - an aspect which
the liquidators have been assessing.
Mr Biggs said while some contracts were "all-but completed"
and requiring minimal work to finish, there were "a number of
building contracts" in "various stages of completion".
"Many contracts are behind and/or, over budget," Mr Biggs
said.
Mr Biggs said a "number of factors" had contributed to
Mulwil's failure, but it was too early to speculate on
details, which would be available from the next report in six
months.
He said Mulwil had experienced "difficult trading for some
considerable time" and its director, Mr Wilson, had made
"numerous attempts to solve the cash-flow problems".
"This included attempts to obtain cash through the sale of
assets, in particular the show home. This sale failed after
parties abandoned conditional sale and purchase agreements,'
Mr Biggs said.
