Unpaid tradesman pulls plug on company

TRACEY CHATTERTON
Last updated 05:00 01/02/2013
The owner of the building housing Napier’s newest five-star hotel, The Viceroy, has been put into liquidation by a contractor after a refurbishment project. The hotel is unaffected.
TRACEY CHATTERTON/Fairfax NZ

REFURBISHMENT WRANGLE: The owner of the building housing Napier’s newest five-star hotel, The Viceroy, has been put into liquidation by a contractor after a refurbishment project. The hotel is unaffected.

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A Wellington company developing a multimillion-dollar hotel in Napier has been put into liquidation because it owes tradesmen more than $110,000.

Maureen Young's company Central City Inn was refurbishing the rundown Tennyson Motor Inn into the luxury Viceroy Hotel when it was placed into liquidation by the High Court in December.

Electrician Steven Hill applied to put the company into liquidation. He said it owed him more than $30,000 for labour and materials.

Another of Mrs Young's companies, Tennyson Properties 2009, owns the building on the corner of Clive Sq and Tennyson St. It has a capital value of $2.1 million.

The Viceroy Hotel, which opened three weeks ago, continues to be in business. Hotel operator Brent Gibson said the hotel was "completely separate" from Mrs Young's company.

"She owns the building. All I've done is I've bought a lease off the company she's associated with."

Contractors were told Central City Inn had run out of money in July last year - nine months after the refurbishment started.

After five weeks of working with no pay, Brian Beckett and his two Lifestyle Building carpenters walked away from the job. "I didn't want to stay any longer and let that debt rise."

Mr Beckett said he was eventually paid for just two of the five weeks' work he was owed.

Five months later, he was still $14,000 short. He was adamant he would never work on one of Mrs Young's developments again, calling it a "Mickey Mouse" operation.

The company owed creditors more than $110,000 and had no assets that could be sold, said liquidator John Fisk, of PricewaterhouseCoopers.

When Central City Inn was put into liquidation, creditors were asked to invoice Tennyson Properties 2009.

Transactions between the two companies would be looked at, along with any "reckless trading" claims, Mr Fisk said.

Incurring debts without a reasonable prospect of being able to pay them is grounds for reckless trading.

So far, there were just two claims against the company but Mr Fisk expected more.

If the claims were warranted, the company would be taken to court in a bid to recover money for creditors.

"Information is very slow coming. We're getting very little co-operation from the director at the moment."

Mrs Young's son Darren, speaking on behalf of his mother, said Central City Inn was put into liquidation because of a dispute over a "small amount" with a contractor. It was all a "storm in a teacup".

He said it would surprise him if liquidators found outstanding debts of $100,000. Paid contractors were still working and were "perfectly happy".

According to the liquidator's report, Central City Inn owes money to Steven Hill Electrical, Brian Beckett, Michael Ferguson, Paul Mayo, Hamish McIntyre, Paris Magdalinos, BR Roofing, Boyd Matenga, GA Contracting, and Hawke's Bay Telephone Company.

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