Steve Rout Contracting Ltd is unlikely to have sufficient funds for secured, preferential or unsecured creditors, the first liquidators' report says.
The company, owned by Steve Rout, was incorporated in August 1995 and ceased trading in May this year, at Mr Rout's request, owing more than $11 million to known creditors.
On May 3, 2011, receivers Stephen Tubbs and Colin Gower, of BDO Christchurch, were appointed by UDC Finance. At the time the company owed secured creditors $7,919,161, of which $7,285,320 was owed to UDC.
Other secured creditors were BNZ, John Deere Credit, Toyota Finance New Zealand, Marac Finance, Porter Hire and Traffic Signs New Zealand.
Unsecured trade creditors were owed $2,120,138.
On August 9 this year the company was placed in liquidation by order of the High Court, with Craig Melhuish and Keiran Horne, of Christchurch, appointed as joint and individual liquidators. Their first report, dated September 7, said, subject to further verification, they estimated there would be "no funds available to unsecured creditors".
"This is because all preferential and secured creditors, such as employee claims (up to $18,700 per employee), Inland Revenue (GST and PAYE claims) and hire purchase contracts must be paid before any unsecured creditors."
At the date of liquidation the company was expected to realise $500,000 from plant and machinery and $79,000 from accounts receivable.
Still to be investigated were voidable transaction investigation, related parties current accounts and actions against certain parties.
Of those investigated, the company owed $7,678,897 to secured creditors; $1,444,095 to preferential creditors; and $2,130,138 to unsecured creditors, leaving the company with an estimated deficit to creditors of $3 million.
Employee claims of $61,375 (gross) in wages and $91,929 (gross) in entitlements had been paid in full by receivers, although one claim remained unpaid.
The liquidators' report attributed the company's problems to "the downturn in the industry, the loss of several large contracts and significant bad debts".
