Debt-plagued firm 'chasing own debtors'

MARTY SHARPE
Last updated 23:33 20/06/2013

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The construction company at the centre of the leaky Hawke's Bay Regional Council building is being pursued by creditors, but says it is itself owed $747,000.

Herbert Construction, which is being sued by the council for some of the estimated $2.2 million needed to repair the council building in Napier, is also being chased for about $100,000 in relation to two other jobs.

Strata Group and Carter Holt have both lodged applications to liquidate the company over respective debts of $33,935 and $65,600. The Strata debt relates to the Paxies building in Napier, while Carter's relates to the Ravensdown building at Awatoto, near Napier.

But director Malcolm Herbert said his company was owed $747,336 in damages and unpaid debts by Ravensdown, which terminated its contract on the construction of a rockstore and canopy building in June last year.

The dispute includes an issue over roofing material that Carter supplied to Herbert for the job.

Ravensdown claimed the material was defective and refused to pay. Herbert consequently refused to pay Carter, but Carter claimed it had to and issued a statutory demand.

In April, Associate Judge Roger Bell set aside the demand, but ruled that Herbert had to pay Carter $65,600 for other material it had supplied.

If it was not paid by the end of April, Carter Holt could apply to place Herbert in liquidation.

Herbert and Ravensdown are in arbitration.

Mr Herbert said he planned to put a compromise to creditors. He would also ask them to allow him to continue with arbitration so the Ravensdown debt could be recovered, saying he "will pay all creditors".

The Ravensdown job had caused "cashflow difficulties", he said. It compounded problems the company had with the loss of $17m on the failed Momi Bay Resort in Fiji. Herbert was the main contractor in the development, which stopped when Bridgecorp collapsed.

Herbert is at present in Fiji as the main contractor of the multimillion-dollar Peppers Resort at Naisoso.

The regional council action saw Herbert initiate action on eight other parties involved in the construction of the building, including Napier City Council.

The council recently said it may include these parties as co-defendants alongside Herbert.

Herbert Construction has been trading for more than 40 years in New Zealand and Fiji. Among its builds are the Onekawa Aquatic Centre and airport terminal in Napier, the Havelock North New World, the Hastings Harvey Norman and various Countdown stores in the North Island.

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- The Dominion Post

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