“The director has advised that the reason for insolvency was due to pricing being insufficient to generate adequate gross margins. An inability to source funding for working capital exacerbated the ability of the company to continue trading,” Vlasic wrote.
“It was also difficult for the company to recruit skilled employees due to immigration restrictions and the Covid-19 pandemic.”
The business stopped operating last Monday when it was liquidated but had employed around 28 staff. Vlasic listed employees as being owed $138,000 in holiday pay and wages.
But in some good news, Alan Perkinson of MMI Shopfit said he had leased KBL’s factory and would expand his existing business into that.
“I’ve negotiated to lease the building which is a bespoke factory, set up for cabinetmaking. We’re expanding and the premises were suited for us,” he said.
MMI already has other operations nearby and the Rosedale operation would be in addition to that, Perkinson said. He hopes to begin work in the factory in about two months’ time.
“We’re also negotiating to buy some of the assets of KBL as well and we’re in the process of that,” he said. Some equipment was old but other fittings would be useful for MMI, he said.
“We’ve also retained some of the staff.”
But Perkinson emphasised that he had “nothing to do with KBL” and had not been involved in any way in the business previously, nor does he have any responsibility for debts.
Others in the sector welcomed Perkinson’s involvement, saying he had knowledge, skills and experience which could help service the currently strong demand for bespoke cabinetry and fittings for apartments, offices and shops.
MMI’s website showed it manufactured and fitted cabinetry and fixtures for the Aviation Institute, dine-in and takeaway restaurant Miss Lucy’s and retail and hospitality investors Tahua Partners.
Those in the building sector said KBL had started out as King Builders, established in the early 1970s, with a substantial and loyal customer base built up over decades and a high degree of skill and proficiency. KBL Joinery is a more recently-established entity, only incorporated in 2020.
MMI has premises at Archers Rd, Hillcrest on the North Shore and offers measure, design and quote, fabrication, delivery and installation services.
Vlasic said in his first report he was negotiating with “an unrelated party for the sale of the company’s assets”.
The liquidator is not promising anything to those awaiting payment: “I estimate that there will be limited funds available for unsecured creditors,” Vlasic wrote in the first report.
Fixed assets appear at only $250,000 in book value, with a possible $230,000 if they are sold. KBL’s debtors owe it around $177,000 but the amount able to be realised is yet to be investigated. Retentions owed to KBL by other businesses but withheld and waiting payment to the insolvent business are listed at $429,000.
How much the staff will be paid, if anything, remains uncertain.
Fletcher Building Products, Fletcher Residential, Colourworx Dye Sublimation, Kiwibank, Affordable Granite Benchtops, Daiken Southland, CSR Building Products, Ricoh Finance, Carters Building Supplies, Summerset Villages (Hobsonville), Hafele (NZ), Staybrite Stainless Fabricators, Monaco Corporation, FleetPartners NZ and United Rentals New Zealand are among the secured creditors.
Kiwibank is estimated to be owed $239,0900, Carters Building Supplies $150,000, Summerset Villages (Hobsonville) $110,000, Hafele (NZ) $146,000, financier Bizcap NZ $350,000 and CSR Building Products $9800.
Immigration Law, Laminex New Zealand, Burns & Ferrall, Royal Wolf NZ, North Harbour Auto Air & Electrical, Busch Australia, Bunnings, Coastal Furniture Polishers, Coffee Distribution NZ, National Fire Protection, Rentokil Initial, Southern Cross Health Insurance, Tauranga Glass, Ullrich Aluminium Company, United Rentals and Steel & Tube Holdings are some of the creditors who appear in the first report.
The names of employees are also listed along with Brian and Barbara Gomes.
How long the liquidation will take is uncertain.
