Creditors wait as pair trade blows
When Trevor Dodd thinks about the $45,500 he gave to Tectonic Construction, he goes completely numb and "can't function at all".
For him, the company has taken advantage of "emotionally stressed people like us", he says.
Dodd, 73, and his wife Alison put all their savings into a deposit in April to pay for the construction of two houses in Canterbury.
One was to be be a new start for the couple after 2 years of battling with insurance and the Earthquake Commission. The other was to be an investment to complement their pension.
However, construction never started. The couple still own the land in Kaiapoi's Silverstream and in Prestons Rd in Christchurch, but will not have the money to build on it.
They now have to rent the quake-damaged house they sold "as is, where is" last year.
The Dodds want their money back but do not know what to do to get it. "If someone robbed a bank of that amount, police would chase them and they would go to prison."
Trevor Dodd said he trusted the businessmen because they put a personal guarantee into the contract. Dodd was also good friends with Steve Hicks' mother-in-law. "Having contracts and going through lawyers, you think everything is legal and safe," he said.
Dodd started to worry when Hicks and Levi Davey stopped answering his phone calls about two months ago.
Davey had gone on a holiday and Hicks was in Wellington, he said.
At the end of May, Davey and Hicks each contacted the Dodds , blaming each other for the company's failure.
When The Press asked Hicks' mother-in-law if she trusted her son-in-law, she said she could not answer that question. "I will have to be his mother-in-law for the rest of my life," she said.
TRADESMEN BLAME EACH OTHER FOR FIRM'S DOWNFALL
Tradesmen behind a failed rebuild firm have been locked in a war of words over who is to blame for the company's downfall while homeowners and subbies want to know where their money is.
Steve Hicks and Levi Davey saw the rebuild as an opportunity to make their fortunes.
But after just a year their business was in financial ruins, owing home owners, suppliers and sub-contractors hundreds of thousands of dollars.
A week ago The Press broke the news that Tectonic Construction was in strife. Since then the company's owners from the lower North Island have traded blows - publicly blaming each other for the firm's failure.
Christchurch police are investigating a fraud complaint lodged by Hicks on June 24. He alleges the company's finances were mismanaged while it was insolvent. Davey has welcomed the investigation and claims his business partner took money from the company.
The Press met Hicks at a quiet cafe on Marine Pde in Paraparaumu Beach on Monday. The troubled businessman arrived in a silver BMW and handed over the company's financial records and other documents, which he believed supported the complaint he made to police.
He was sorry for what had happened and left an hour later, supposedly too cash-strapped to pay for the coffee he ordered. That is no comfort to homeowners and subcontractors who lost money to the company.
Erica McLachlan paid Tectonic more than $220,000 in advances for a land and house package in Kaiapoi's Silverstream development.
Construction of the house stalled earlier this year and Silverstream Estate said it was never paid for the land. McLachlan does not want an apology, she just wants her money back.
At least three other homeowners have lost their deposits.
But Hicks claims he was not to blame.
He told The Press the company was launched in May last year. As tradesmen, he and Davey saw the rebuild as a lucrative business opportunity.
Hicks primarily worked from his Wellington office and recruited staff for the company. He said he was paid about $800 each week in wages.
Davey was in charge of the day-to-day running of the business in Christchurch. He had control of the finances, so he could pay suppliers and sub-contractors.
Hicks said everything seemed to be going well until recently, when he accessed the company's financial records and discovered it had been trading while insolvent.
A total of $677,000 had been deposited by homeowners into the company's account and there were four houses unfinished. He questioned where all the money had gone.
The documents he provided to The Press suggest tens of thousands of dollars was diverted from the company's account into credit cards held by Davey and his brother.
Hicks believed his business partner was using Tectonic's money to prop up another company he owned, Hot Stuff Insulators, which owed almost $80,000 in overdue tax payments to Inland Revenue in May.
Davey has not met with The Press but in a statement denied any wrongdoing.
He said money was paid into credit card accounts so the firm could earn air points on them. Hicks shared the company's financial duties and knew that, Davey said. Problems arose when Hicks withdrew $38,000 from the company, which left Tectonic vulnerable to incoming expenses, he said.
Hicks said that money was put in a holding account and used to pay company debts.
Tectonic is the latest in a long list of building firms that have failed in Canterbury recently.
An inquiry by The Press revealed twice as many businesses connected to the rebuild failed in the first three months of this year compared with the same period 12 months ago.
Between them they owed millions to creditors, who were unlikely to ever recover their money.
Many of the companies were small contractors who started after the quakes and expanded quickly to try to cash in on the $40 billion rebuild.
Experts said most companies failed because those in charge were inexperienced and did not have the nous to run a rapidly expanding business.
Another Christchurch company, which trades as Tectonic Enterprises Ltd, is not related to Tectonic Construction.