Abode creditors may be left hanging
New Plymouth's Abode Design and Build owes more than $1 million, the liquidator's first report shows, and unsecured creditors may not get any of the money they are owed.
The construction company was placed into voluntary liquidation this week by its director Lyall Craig Dix.
A report by Greg Eden of Staples Rodway posted on the Companies Office website yesterday showed the company had assets worth $191,000, however its liabilities totalled $1,048,000 which includes $823,000 of unsecured trade and other creditors.
"The liquidators expect unsecured creditors will make no recovery of monies owing to them," the report states.
From an initial review of the annual financial statements it was evident the company significantly increased its borrowings over the last two years in order to continue to operate.
"There have been significant trading losses incurred over the last few years, and in the current financial year. This has led to the company experiencing cashflow difficulties for some time prior to the appointment of the liquidators."
Mr Eden said the liquidators were aware of creditors' concerns that the company may have traded while insolvent.
"To this end the liquidators are investigating the affairs of the company with particular attention to the actions of the director up to date of liquidation."
He says from the records made available to the liquidators, at the time of the appointment the company was prima facie insolvent.
"At this time we have not been able to determine how long the company traded under insolvent circumstances, if at all."
He said an appropriate investigation would be carried out and the findings reported to the Registrar of Companies as considered necessary.
"The liquidators will pursue appropriate action against the director to the extent considered economically beneficial if evidence exists to support such action."
Mr Eden's report says the statement of position was provided by the management of the company and had not been investigated by the liquidators yet.
"It is possible that subsequent investigation could result in a revision of the information thus presented."
Taranaki Daily News