20 Sep 2011

No money expected for Sovereign Homes creditors

6:09 am on 20 September 2011

Creditors owed money from failed home builder Sovereign Homes have been told not to expect any money back.

The Auckland-based company was placed into liquidation in March after a significant drop in orders for new homes and delays between contracts being signed and building getting underway.

In their latest report, liquidators Accru Smith Chilcott say there will be no money available to distribute to any class of creditors.

The company's staff are owed $60,000, Inland Revenue is owed $54,000 and 81 unsecured creditors are owed more than $1 million.

The liquidators say a $75,000 bond payment with the company's landlord, Property for Industry, is unlikely to be recovered as the property has not been re-let.

Debts have also been hard to recover because construction is incomplete or needs more work, or owners have paid subcontractors directly to get them back on the job.

The liquidators fees so far total $44,000. The liquidation is expected to be complete in November 2012.