Those owed money will have to decide whether to either accept 60c in the dollar owed or take their chances with Mr Mains liquidating the company.
The former All Black and All Blacks coach has offered to forgo $154,000 he is owed by Clan Construction Commercial and, as 70% shareholder and sole director, would put $20,000 cash into the creditors’ pool, but only if they accept the compromise at the Dunedin meeting on Friday.
The company’s other 30% shareholder is Michelle Macmillan, managing director of GJ Gardner Homes in Dunedin, who was a Clan director until March, who would put in $10,000 cash, and forgo $74,987 owed to her.
Those deals are off the table if the compromise is not accepted.
There are 15 Central Otago and Dunedin creditors, including construction suppliers and sub-contractors owed a total $410,885, including one owed $87,500, one $50,000 and two about $48,000.
If the 15 companies accept the compromise, they will collectively lose $160,000.
But the proposal disallows a further $68,500 in claims by four of the 15 companies, under the heading ‘‘Over quotation amount excluded’’, which implies cost overruns will not be met.
A disgruntled creditor, who did not want to be identified, delivered a copy of the 10-page creditors compromise to the Otago Daily Times.
‘‘We are tired and the total owed ... from April has nearly broken our little business completely, not to mention the stress in the family from this,’’ the creditor said.
The company got into difficulties during a Queenstown project, on Frankton Rd.
While winning an adjudication over unspecified issues at the site, ‘‘significant costs’’ were incurred by Clan Construction Commercial which meant all ‘‘profit on the project has been lost’’, creditors were told in the compromise document.
When contacted for comment, Mr Mains acknowledged that while he was still a director and shareholder of Clan Construction Commercial, he ‘‘hasn’t been near the company for two years’’.
‘‘Someone else has been running it for a couple of years. I’ve had nothing to do with it.’’
When pressed about the details of the compromise proposal, Mr Mains said he ‘‘had nothing to do with putting the compromise together’’.
Mr Mains initially suggested the ODT contact his lawyer, but when pressed declined to identify the lawyer.
Mrs Macmillan was contacted for comment, acknowledging she still had ``a small share'', her 30% stake, in Clan Construction Commercial.
She declined further comment, because the issue was ``live'' and she ``did not want to risk the integrity of the [creditors] meeting'', on Friday.
Clan Commercial Construction's assets include $224,000 cash and a further $45,000 owing from an insurance claim, tax refund and one work vehicle, plus the company's shareholders, Mr Mains and Mrs Macmillan, are offering to put $30,000 cash in the company, and forgo $229,670 in payments owed to them.
Company liabilities of $660,556 include the creditors' $410,885 and also ``shareholder advances'' of $154,682 to Mr Mains and $74,987 to Mrs Macmillan, the claims they are offering to forgo if the compromise is approved on Friday.
``The company will immediately pay 60% of the sums shown on the creditor list as owed to each creditor,'' the compromise proposal said.
A 60% share of the total $410,885 owed to the 15 businesses is about $250,800.
The compromise proposal said if the proposal was not approved by the creditors on Friday, Mr Mains and Mrs Macmillan as shareholders would place Clan Construction Commercial in liquidation.
They would not advance the proposed $30,000 to the company and would claim the total $229,670 owed to them.
``For these reasons, the proponent believes that the compromise will result in more money being paid to the creditors, more quickly, than the counterfactual of liquidation,'' the proposal said.
For the compromise proposal to be passed there must be a majority representing 75% of the value of creditors, meaning 75% of the total $410,885 owed to the businesses.
