Clan Construction Ltd went into liquidation on March 7 and material price increases and supply issues, Covid, a lack of profit on contracts and franchise fee commitments were all listed as reasons for its failure.
In their recent report, liquidators Trevor and Emma Laing said the exact amount of the secured and unsecured claims was still being confirmed and they were aware there were potential further claims.
Some creditors might not have been able to quantify the amount of their claim as yet and it was expected the total amount of all claims would exceed $2 million, which was "far in excess" of the available company assets.
Clan Construction was incorporated in January 2005 and undertook mainly residential new builds, initially under a franchise arrangement with GJ Gardner Homes but more latterly, independently.
It has two directors, former Otago rugby player Brett McCormack, who also holds 40% of the company’s shares, and businesswoman Michelle Macmillan, who holds 60% of the shares.
Once it was placed in liquidation, the company was unable to provide any further services to complete the contracts in progress.
Unfortunately, it appeared that some, if not all, of those clients had made payments in advance of the stage their contract was at, the report said.
There was a final payment outstanding for one completed build; that payment was disputed by the clients, an inspection was undertaken by an independent third party and a settlement had now been agreed.
There were a number of transactions that required further analysis and it was not clear if those investigations would identify any further actions required.
"Certainly, the level of company debt is concerning, and the liquidators are aware that there are many parties who are creditors for significant amounts. The liquidator’s investigation into the causes of the company’s failure will continue," the report said.
The physical assets owned by the company consisted of a vehicle, small excavator, trailer, building tools and office equipment. It was eventually agreed with Heartland Bank that the majority of the physical assets would be removed and sold via online auction.
The sale of most of those items had been completed and there were a small number awaiting sale. Two leased vehicles were returned to the lessor as required by the lease agreement.
It was expected the liquidation would be completed within the next 12 months. Given the limited further assets, a distribution to unsecured creditors — of which there were 36 listed — was not anticipated.
- Have you been affected by Clan Construction’s collapse? Contact sally.rae@odt.co.nz
