Building firm collapses - owing $5.5m

Valiant Homes, which was put into liquidation and receivership last week, mostly took up building contracts with related parties.

Liquidator says subbies walked off and supplies dried up when the money stopped.

An Auckland building contractor has collapsed with creditors chasing almost $5 million from it.

Valiant Homes, which was put into liquidation and receivership last week, mostly took up building contracts with related parties.

However, liquidator Grant Reynolds said in his first report that these related parties lacked the funding to pay the company so it, in turn, could pay subcontractors and suppliers.

Subbies walked off the job and suppliers stopped providing goods when they weren't paid, Reynolds' report said.

The company's landlord also terminated its lease and it then had no office to operate from.

Liquidators were appointed by the company's shareholder, Hamish Clarke, on March 4. Receivers were appointed the next day.

Suppliers are claiming $1.48 million from the company and Inland Revenue is claiming $40,000, said the liquidators' report.

The company had office equipment and furniture worth around $500 and co-liquidator Pritesh Patel said they were assessing whether money was owed by related companies. "This is not a simple liquidation. This is quite a mammoth task," he said.

Creditors who had security over specific assets such as diggers had already taken possession of them, Patel said.

PKF's Chris McCullagh, one of the receivers appointed by Savings & Loans, said the lender was owed about $3.3 million.

He believed the company was working on at least 15 sites around Auckland before it folded.

Months before the company ceased trading it got into hot water with the Philippine Overseas Employment Administration, which suspended its ability to recruit workers from the country.

According to the agency, eight Filipino construction workers were employed by Valiant Homes at around $800 a week. The agency believed they were being short-changed by about $80 a week.