Sacked ELE construction workers protest outside Deloitte offices on Queen St in Auckland demanding pay this year. Video / Carson Bluck
Deloitte receivers plan to sell a company connected to the insolvent labour recruitment hire business ELE from which about 1000 staff were sacked just before Christmas.
David Webb, a receiver, said today an agreement has been struck to sell ELE Security to Red Badge Group.
“Following asale process that saw a number of parties express interest in acquiring the ELE Security business, we are pleased that an unconditional sale agreement has been executed.
“The transaction with Red Badge allows for the ongoing employment for staff, continuity of security services and the risk management training offering for the existing ELE Security customer base,” Webb said.
Around 750 Filippino workers were laid off in December and some protested outside Deloitte offices at 80 Queen St, pleading to be paid. More than 30 people gathered with flags and banners demanding financial aid, in the group organised by union officials.
Mikee Santos, Union Network of Migrants co-ordinator at the rally, said on January 19 that the workers were desperate for help, suffering without any pay since December 20.
Today’s announcement of the pending sale could help ELE workers owed money.
Webb said: “The sale of the ELE Security business to Red Badge will not only see continuity of employment and ongoing service to customers of the ELE Security business, but will also result in additional funds being available to the receivers of the wider ELE group to support affected stakeholders, including employees.”
ELE Ltd, ELE Management, ELE Holdings, Tranzport Solutions and RISQ New Zealand were all placed in receivership.
After unsuccessful attempts by owner-director Brent Mulholland to get additional funding or sell the business, he asked the bank to appoint receivers. Mulholland had been cooperative in making all information available to Deloitte.
Brent Mulholland of ELE.
Webb said today that just yesterday, Mulholland had asked for the last remaining company in the group - ELE Security - to be placed into receivership to help facilitate the sale.
Mulholland was quoted in the Deloitte statement: “Red Badge has a stellar reputation for providing exemplary service to its customers and I’m pleased that Ben and the team have been successful in purchasing the business”.
Webb said: “The remaining steps required to close the transaction are expected to be completed later next week, allowing the sale to conclude”.
A separate statement issued by Deloitte today came from Red Badge chief executive Ben Wooding.
It said ELE Security was previously called Bespoke Security and RISQ NZ. Guarding services make up more than 80 per cent of Red Badge Group’s operations.
“We are thrilled to welcome ELE Security customers and staff to the Red Badge family,” Wooding said.
Deloitte’s first report on the ELE collapses on February 20 put claims at $12.3m.
The biggest failure is ELE Ltd which has $10.8m claims. Secured creditor the BNZ is claiming $5.77m. Some claims from other secured creditors Carters Building Supplies, De Lage Landen, Bridgestone New Zealand and PlaceMakers Christchurch are yet to be confirmed.
Employees are owed $4.08m in pay and Inland Revenue $1.05m, resulting in preferential creditors being owed $5.1m, according to the report from David Webb, ELE’s receiver and manager.
So the $5.77m secured creditor claim and the $5.1m preferential creditor claims add up to the $10.8m overall claims for ELE which is just one of the insolvent businesses.
Tranzport Solutions has claims of $955,000 of which secured creditors want $703,000 and preferential creditors $255,000.
ELE Management has claims of $582,000.
Anne Gibson has been the Herald’s property editor for 24 years, has won many awards, written books and covered property extensively here and overseas.
