Liquidators say "something has gone seriously wrong" for a Central Otago building company to go under, with $870,000 in liabilities, when there is no shortage of work in the area.
Whelan Construction operated as a Highmark Homes franchisee for the Central Otago area for about four years, directed by Warren Whelan.
Its office was in Alexandra and it ceased trading shortly before its liquidation on January 25.
Mr Whelan also directed a Highmark Homes franchise in Christchurch servicing the Canterbury region, which went into liquidation earlier last month.
A report by liquidators Trevor and Emma Laing on the Otago business said an initial assessment indicated "something has gone seriously wrong" for the company to end up in this situation in a climate where there was no shortage of work available.
"As far as the liquidators can ascertain, the standard of workmanship supplied has not caused any significant concern to clients.
"Clearly, further inquiry and a detailed analysis of the company’s activities needs to be undertaken to try to discover the cause or causes that have resulted in its liquidation."
The company records disclose 74 unsecured creditors.
The report identified only a few active contracts. Three were new builds that had "some way to go" to completion. The remainder were alteration-type works or contracts that required some remedial work.
The liquidators were liaising with the clients and the franchisor to come to an arrangement regarding the work.
The company has a joinery workshop in a leased premises in Alexandra and the liquidators were advised there was a party interested in purchasing it on an "in situ" basis. The Inland Revenue Department was owed preferential GST and Paye, the report said.
The company had entered a repayment programme but the amount outstanding needed to be confirmed.
All wage and holiday pay entitlements were paid to employees up until the date their employment was terminated.It was too early to establish if there would be funds available to pay a dividend to unsecured creditors, the report said.
The liquidators were reviewing company records to establish if any further assets were available and would release another report within 12 months.
Mr Whelan said he did not want to comment while the matter was before the liquidators.
