The subcontractor in dispute with a construction company at
Queenstown's Kawarau Falls Station development owes creditors
almost $5.2 million.
CBD Construction, with offices in Cromwell and Christchurch,
was placed in liquidation last month.
Before the liquidation, it took 50 workers off the Kawarau
Falls site after a dispute regarding a "payment schedule"
with Hawkins Construction.
CBD was subcontracted by Hawkins Construction to provide all
the carpentry work for the 177-room Westin Queenstown, one of
two hotels being built in stage 1 of the development.
Hawkins Construction terminated the contract and CBD walked
off the site.
Andrew Oorschot, of Ashton Wheelans and Hegan Ltd, was
appointed liquidator over the company, whose directors are
Grant Blackmore and James Fry, of Christchurch.
Mr Oorschot's first report says the company owes creditors a
total of $5.18 million.
It owed $135,000 in staff wages and holiday pay, $100,000 to
the Inland Revenue Department, $232,000 to ANZ Bank and $4.7
million to unsecured creditors.
More than 250 creditors were listed in the report on the
Companies Office website.
Mr Oorschot's report said the company's assets consisted of
debts it was owed for construction work undertaken.
"Given that a number of customers have determined and/or
terminated their construction contracts due to
non-performance by the company, the likely recovery of
balances owing under these contracts is difficult to
predict," he said.
"Our best estimate at this stage is that the likely recovery
for unsecured creditors is likely to be around 20c in the
dollar."
The prospect of paying back debts was also in doubt because
of "disputes and/or the customers' ability to pay the balance
owing under certain contracts", he said.
CBD Construction has been in business for more than 20 years.
It had been trading profitably up to March 31 last year, when
it began to have cashflow difficulties because of non-payment
by debtors, contractual disputes, and head contractors
terminating large contracts on which the company had been
working. The company ceased trading and shareholders placed
it into liquidation on March 17.
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