Designline was sold last August for $3 million. It was placed in liquidation in the middle of last February, in the High Court at Christchurch at the petition of unsecured creditor Eni Engineering Ltd.
The liquidators' recent six-month report outlined a $7 million shortfall to more than 20 unsecured creditors, Inland Revenue, the Bank of New Zealand and employees.
While Eni is owed more than $870,000 and Farra is owed more than $312,000, the official assignee said it was "unlikely" there would be a dividend for unsecured creditors.
"It is unlikely that any assets will remain for the benefit of unsecured creditors," the liquidators said in their report.
Farra chief executive John Whitaker was contacted yesterday and said provision had already been made for the more than $300,000 debt and there were "no implications" for staffing numbers or any prompt to seek cost savings.
"Designline is still there [under new ownership] and we are trying to get some new work from them," he said.
Farra has been manufacturing chassis and body components for Designline for about two years.
Despite the recession and global financial crisis, Mr Whitaker said during the past 14 months Farra had taken on a further 15 staff, sales were up and business was "buoyant", although "we are still having to work hard for it", he said.
The liquidators said in their report that the official assignee would "also consider a claim for any shortfall in the liquidation against the current and former shareholders of the company" because the company did not trade with limited liability.
Once New Zealand's largest bus maker, Designline was sold last August to DesignLine Bus Pacific, a joint venture of Malaysian interests as majority shareholders, the previous United States controlling shareholders, the Glosson family of North Carolina, and other United States investors, the receivers said a few months ago and Fairfax New Zealand News reported yesterday.
Designline's controlling shareholders after late 2006 were the Glosson family, headed by Buster Glosson, a retired United States Air Force lieutenant-general.
The receivers' second report was also released last month and Keiran Horne and Craig Melhuish of HFK said $2.2 million had been repaid to the first-ranking creditor, BNZ, but it was still owed a further $1.67 million plus interest.
Employees, who are preferential creditors, had received 22c in the dollar, totalling $105,337; but they are still owed $373,467.
IRD was paid $90,771 for GST owed and $283,237 for PAYE, the receivers said.
However, IRD has more claims against Designline.
The liquidator's report said IRD was also claiming $3.58 million made up of $1.42 million as a preferential unsecured creditor and $2.15 million as an unsecured creditor.
The receivers said they had brought in receipts of $5.59 million in the six months from June 1 to December 1, 2011, including $3 million from the sale of the business and $2.12 million from trading-on income, although trading-on costs were greater at $2.4 million, Fairfax reported.
Several matters remain unresolved.
While the New Zealand creditors are out of pocket, the American Designline operation based in Charlotte, North Carolina, had raised $US50 million from at least 19 investors, the Charlotte Business Journal reported a month ago.
The US operation is focused on the hybrid-electric bus technology it bought from the former owner and founder of Designline, John Turton, of Ashburton, in late 2006.
The US operation has been strapped for cash too, but managed to raise $US11.25 million in late 2010 - enabling it to restart its factory - and now the further $US50 million.
