15 Mar 2011

Sovereign Homes owes $4.25m

3:59 pm on 15 March 2011

Liquidators of the failed Sovereign Homes say the company owes $4.25 million.

The Auckland-based company, which was one of New Zealand's largest non-franchised house builders, was placed in liquidation last week.

The liquidators from Accru Smith Chilcott have just released their first report, which shows they expect to realise $110,000 from the company's assets.

But that will not be enough to repay staff and the Inland Revenue Department, which are owed $123,000.

Sovereign owes unsecured creditors $2.3 million.

The liquidators highlight a number of reasons for the company's failure, including fewer contracts for new homes, increased competition eroding profit margins, and delays between contracts being signed and building getting underway.