The company is owned by Burns Group 2018 Ltd, which is also in liquidation, and its sole director is Malcolm Burns. It provided excavation services which consisted of works required to support the forestry operations of related companies and works for external clients on residential and commercial developments.
The first report by joint receivers Colin Gower and Diana Matchett, of BDP Christchurch, showed the company owed more than $3.3 million and the second report showed it still owed creditors nearly $3 million, after the sale of most of its plant and equipment.
The third report, released this month and covering the period from May 18 to November 17 last year, said the receivers continued their engagement with automotive auction service Manheim to realise all the company’s assets through an independent online auction process.
At the date of the latest report, 22 vehicles had been sold for a total sale price of about $404,000, net of auctioneer costs and commission.
Three of those vehicles were realised during the reporting period.
The vehicles sold during the period comprised trucks, tractor units and trailer units. At the date of the report, 14 items of plant and equipment had been sold for a total sale price of about $12,000.
The receivers continued to work through workers’ lien claims over four of the company’s vehicles. A lien is the legal right of a creditor to sell the collateral property of a debtor who fails to meet the obligations of a loan contract.
The receivers would continue to engage Manheim to realise any of the remaining four vehicles, subject to the validity of those lien claims.
It was expected all company vehicles capable of realisation would be realised within the next reporting period, the report said.
During the reporting period, an interim distribution of about $34,000 was made to secured party PFNZ Ltd, an independent property finance specialist, with respect to GST refunds relating to bad debt write-offs subject to PFNZ Ltd’s general security agreement.
As at November 17, money due PFNZ either directly or through cross guarantees held totalled $1.1 million plus accrued interest. Amounts due related to an invoice finance facility secured by the secured party’s GSA dated February 4, 2021 and specific security over the company’s accounts receivable.
An interim distribution of about $24,000 was made to Kiwi Asset Finance Ltd with respect to assets realised subject to KAFL’s specific security interests.
As at November 17 last year, money due to KAFL either directly or through cross guarantees held totalled $1.6 million plus accrued interest, of which $268,000 specifically related to the company while $1.33 million related to cross guarantees held. All money due was secured by way of specific security interest against the majority of the company’s vehicles.
A distribution to preferential creditors was subject to asset realisations. A distribution would be available only if there were available proceeds from accounts receivable and/or inventory, the report said.
Two employees were terminated on the appointment of receivers and employee preferential claims were estimated to be about $20,000.
Inland Revenue had submitted a proof of debt which detailed a preferential claim of about $64,000 with respect to outstanding GST and PAYE deductions.
Based on asset realisation within the reporting period, it appeared unlikely there would be sufficient funds available for a distribution to preferential creditors.
The receivers were still in the process of realising the remaining assets of the company which was expected to be completed within the next reporting period.
However, based on the realisations to date and anticipated realisations during the next reporting period, it appeared unlikely there would be any funds available for unsecured creditors.
