Bank debt settled, employees and shareholders 'unlikely' to be paid

Unsecured creditors are owed more than $800,000 after an Oamaru construction company was placed in liquidation earlier this year, a second report into the company's financial affairs says.

However, it was unlikely they will see any of that money, the October 17 report says.

Harper Enterprises (2007) Ltd, which operated under the name CKH Homes, was placed in liquidation by a special shareholders' resolution on April 17.

Christopher and Karen Harper, of Oamaru, are listed as its directors and joint shareholders on the company's profile on the New Zealand Companies Office register.

Geoff Brown and Lynda Smart, of Rodgers Reidy Chartered Accountants were appointed liquidators.

An initial report on the company's position was sent to all creditors on April 26. This report showed the company owed 78 creditors, which remained unchanged, a total of $719,521.

Of that, $23,284 was owed to preferential creditors (employees); $60,279 to general security agreement holders; $187,291 to purchase money security interest holders and a further $448,667 to unsecured creditors.

The most recent report has revealed the latter figure had ballooned to $801,229 in the six months since the company was put into liquidation.

Mr Brown said no payments had been made towards preferential employee claims or unsecured creditors and in the case of the latter, it was doubtful that would change.

"It is unlikely that secured creditors will receive a dividend payment upon completion of the liquidation,'' the report said.

A part payment of $29,830 had been made to Martin Business Capital Ltd which was owed $60,279, and the total debt owed to Westpac of $17,331 had been settled.

A total of $95,635 was earned through the sale of the company's assets, which included five vehicles.

The company was incorporated in November 2007 and ceased trading on April 17 this year.

It was the G J Gardner Homes franchisee in Oamaru until the franchise agreement was cancelled by the franchisor in December 2017.

From then on, the company traded as CKH Homes.

It had two employees when it was liquidated and another seven were employed by C&K Harper Builders (2014) Ltd, which had "shareholder commonality'' with the company and was also placed in liquidation in April.

It was not known when the liquidation would be completed.

daniel.birchfield@odt.co.nz

 

Comments

It is appalling that in these cases employees rank below banks or private lenders.
Employees have no power in terms of deciding whether to come to work or not, even if they know that company finances are questionable. They are no doubt working hard to do what they can to help the company out, through fear of things not working out. Their wages equate to food on the table in the near term, or a roof over their family's head.
Lenders on the other hand contract themselves into near no-risk scenarios and the company borrowing is incentivised to help the banks avoid risk through cheaper interest rates.
This is exploitation at it's finest. The rights of providers of labour should be prioritised over the rights of providers of capital.

 

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