And so it begins.....
10 February 2009
10 February 2009
Building firm fails owing thousands. A Wellington building firm has collapsed, leaving subcontractors thousands of dollars out of pocket and 10 homes half-built.
David Reid Homes Wellington went into voluntary liquidation yesterday. The parent company, David Reid Homes, has promised clients their houses will be finished by another franchisee but subcontractors say they are paying the price for the failure.
A Wellington builder, who is owed about $40,000, said he had been forced to lay off three of his four staff.
One plumbing company is believed to be owed about $100,000, while an electrician is due $77,000.
The builder said: "The company told us a few weeks ago to stop work till they could sort out the cashflow.
"If things don't pick up, I'll have to look at shutting the doors myself in a couple of months."
He said he was owed a further $10,000 by the former owner of the David Reid Manawatu franchise, who went bust just before Christmas.
David Reid Homes was looking after clients but was apparently "not bothered" about contractors, he said. "We're all thousands out of pocket."
The Wellington franchisee, Steve Franklin, could not be contacted yesterday.
David Reid Homes general manager Ben Allan confirmed that the Wellington company was in voluntary liquidation.
Ten half-finished building projects, including two in Wairarapa, would be completed by the Kapiti franchise.
He said all subcontractors would be offered the chance to complete the work in the first instance, but he was unable to say whether they would be paid for work previously done.
"I can't tell you how much is owing. That's a matter for the liquidators."
Despite the failure of three other David Reid franchisees in recent months in Palmerston North, Pukekohe and Marlborough Mr Allan said he was confident that other franchises were "robust".
Construction Industry Council chairman Richard Michael said a series of collapses reflected the depth of the recession and the fact that credit "totally dried up" late last year.
Mr Michael said a company's collapse often had nothing to do with the quality of the firm or its management.
"It's just a timing issue. These companies had no warning, no way of avoiding the position they find themselves in ... but the collapse of a large company is going to have wide ramifications for other companies."
David Reid Homes Wellington went into voluntary liquidation yesterday. The parent company, David Reid Homes, has promised clients their houses will be finished by another franchisee but subcontractors say they are paying the price for the failure.
A Wellington builder, who is owed about $40,000, said he had been forced to lay off three of his four staff.
One plumbing company is believed to be owed about $100,000, while an electrician is due $77,000.
The builder said: "The company told us a few weeks ago to stop work till they could sort out the cashflow.
"If things don't pick up, I'll have to look at shutting the doors myself in a couple of months."
He said he was owed a further $10,000 by the former owner of the David Reid Manawatu franchise, who went bust just before Christmas.
David Reid Homes was looking after clients but was apparently "not bothered" about contractors, he said. "We're all thousands out of pocket."
The Wellington franchisee, Steve Franklin, could not be contacted yesterday.
David Reid Homes general manager Ben Allan confirmed that the Wellington company was in voluntary liquidation.
Ten half-finished building projects, including two in Wairarapa, would be completed by the Kapiti franchise.
He said all subcontractors would be offered the chance to complete the work in the first instance, but he was unable to say whether they would be paid for work previously done.
"I can't tell you how much is owing. That's a matter for the liquidators."
Despite the failure of three other David Reid franchisees in recent months in Palmerston North, Pukekohe and Marlborough Mr Allan said he was confident that other franchises were "robust".
Construction Industry Council chairman Richard Michael said a series of collapses reflected the depth of the recession and the fact that credit "totally dried up" late last year.
Mr Michael said a company's collapse often had nothing to do with the quality of the firm or its management.
"It's just a timing issue. These companies had no warning, no way of avoiding the position they find themselves in ... but the collapse of a large company is going to have wide ramifications for other companies."
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