Liquidators have "relinquished" more than 20 claims by people with disputed contracts with Signature Homes Otago, whose parent company Murwil Construction Ltd was placed in voluntary liquidation a year ago and owes $1.3 million to 160 unsecured, mainly Otago businesses.
The National Bank has been paid $470,000 as a secured creditor, but is still out of pocket and it is unlikely the $1.3 million owed to unsecured creditors can be paid, joint liquidators say.
Liquidators Hudson Biggs, of Keogh McCormack, and Trevor Laing and Associates lodged their six-monthly report to the Companies Office in late April, outlining cost overruns, legal action and disputed contracts, all of which were making for a "problematic" liquidation process.
After their appointment, liquidators found a "feature" of Murwil was that many of the contracts "on the books" had deviated from project budgets and, in many cases, were subject to dispute over non-completion, cost overruns or workmanship issues.
Some people had begun legal action against Murwil.
"The liquidators have ultimately ended up disclaiming many of the contracts," Mr Biggs, said in the report.
When contacted yesterday, he said there were about 20 partially-completed homes when the liquidators took over, "most of which" had since been completed, but also "most" had myriad counter-claims and disputes with Signature Homes.
"We have relinquished most of the contracts, on the grounds there is no more money and because most of them are in a dispute of one kind or another," Mr Biggs said.
Of the $1.3 million owed and lack of remaining tangible assets to sell, it was "extremely unlikely a dividend would be available" to those unsecured creditors, he said.
Murwil Construction was placed in voluntary liquidation by owner Murray Wilson in July 2009, having bought the Signature Homes franchise in in 2007.
The previous franchise holder, Brycar Holdings Ltd, was placed in liquidation about five years ago, reportedly owing about $1 million.
Its contracts were initially overseen by the parent franchise company, under Signature Homes Otago Ltd, before being sold to Mr Wilson and coming under Murwil Construction.
Mr Wilson was adjudged bankrupt in the High Court at Dunedin in mid-April, over a $64,000 debt to Fletcher Steel.
The building materials division of Carter Holt Harvey subsequently withdrew a separate bankruptcy application.
Mr Biggs said the volume of disputed contracts and geographical spread, ranging mainly in Southland but also as far afield as Omarama, meant working through individual circumstances had been a time-consuming process.
"As a consequence of the disputes ... the collection of accounts receivable has been problematic, with various arguments being raised by some home-owners to thwart this process," Mr Biggs said.
Dunedin Signature Home buyer Alan Heathman claims to be owed more than $50,000 in credits, costs and compensation on his completed house, which he has been living in for three years.
He said Signature Homes' franchise parent, and now the liquidators, had declined to meet his demands and he believed his was now considered a "disclaimed contract".
While he is seeking legal advice, it was likely to be too expensive to take the dispute in the High Court, he said.
When contacted, Mr Laing said "a number of transactions" by Murwil Construction, before its liquidation, were being looked into, but he declined to comment further.
The liquidators stated they were "in the process of reviewing legal remedies" to advance debt recovery, but Messrs Laing and Biggs declined to outline the processes, saying there were "several factors" still being considered.
Murwil's show home in Fairfield, in Dunedin, did not escape attention in the liquidators' report, described as having become "over capitalised" during its construction, Mr Biggs said.
It had been sold by liquidators for $470,000, including GST, $357,301 of which was paid to the National Bank, which carried a first charge registered mortgage over the property.
