Bust Masterton firm owes $1.5m

FOLDED: Masterton company Bruce Buchanan has gone into voluntary liquidation. PHOTO/LYNDA FERINGA

A Masterton civil and roading contractor of more than 50 years standing has gone into voluntary liquidation owing almost $1.5 million.

Family firm Bruce Buchanan, which recently sold its business and assets to Fulton Hogan, owes an estimated $1.48 million to unsecured creditors and went into liquidation on Friday.

In the first liquidator's report Iain Shephard of Shephard Dunphy said the business and assets were sold to Fulton Hogan before the liquidation, with the proceeds from the sale going towards bank and machinery finance debt, and to employee entitlements.

"Following the sale it became clear that even with the realisation of residual assets, there was likely to be a shortfall to unsecured creditors."

The company's employees had been paid out in full before Bruce Buchanan went into liquidation, Mr Shephard said, and the majority of the company's staff had been employed by Fulton Hogan.

The report shows the company owes an estimated $55,252 to Inland Revenue and $1,425,429 to trade creditors.

The book value of the company's assets was estimated at $2,466,579 but it was unsure how much of this could be realised.

However it was expected there would be a "significant" payout to creditors, Mr Shephard said.

"There is going to be a significant distribution to creditors, anywhere between an estimated 40 to 70 cents per dollar. It's not a complete disaster. There's actually going to be a chunk of money to unsecured creditors ... it's not all doom and gloom."

Money had already been paid to the firm's secured creditors.

Over the next few months assets would be realised and payments made to creditors, Mr Shephard said.