Watertight is understood by receivers to be owed almost $420,000 in bad debts and separate retention payments, the latter held by the main contractors from earlier, completed, construction projects, some of which will be claimed back during the next 12 months. Asset values have not been estimated.
Watertight was incorporated in mid-2004, with its directors Craig Borley and Gary Burgess, of Mosgiel, being equal majority shareholders.
Gus Jenkins, of Insolvency Management Ltd, understood Watertight had been through a period of expansion during the previous three to four years, then with the recession, had laid off some staff but its fixed overhead costs, such as vehicles and premises, had been "quite high".
The insolvency was attributed to a number of accumulated bad debts which resulted in a "significant loss", which led to cash flow problems "which has ultimately resulted in the inability to keep trading," Mr Jenkins said in his first report yesterday.
Mr Jenkins said the non-payment of some retention cash may have also compounded the financial problems recently faced by Watertight and noted the retention cash "can be difficult" to claim back.
He forecast there would be an unspecified dividend likely for 16 known secured creditors and 18 preferential creditors, 17 employees and IRD, but financial information was still being collated.
There are 112 known unsecured creditors at present.
Mr Jenkins said staff were laid off from Watertight two days before the company was formally placed in liquidation, on August 31.
Securities are held on a variety of plant, machinery and vehicles, with some of the 16 secured creditors including ANZ, Monument Finance, Solar Group, Mosgiel Motor Court and listed Steel and Tube.
