Results 1 to 13 of 13

  1. Post
    #1

    Company liquidation stuff

    Quick query.

    We had a minor building contract with Company A. About a year ago, we paid them a deposit (50% of the job cost) to begin work. At the design stage, the job went on hold for a couple of months while we worked out some minor details for some third party work to be done so that they could complete their part of the job. We'd essentially paid 50% of the job cost up front without any work being done.

    Now, early this year I got an e-mail from a liquidators saying that this company had been liquidated and they were in the process of on-selling the company to a third party including the current contracts. A month or so later, Company B has now purchased the remnants of Company A and we have enlisted them to complete the project.

    When it comes time to settle the final bill, are we entitled to deduct the deposit amount from the final bill? The complete cost from Company B is a bit more than what Company A were going to charge, which is fine, I'm just hoping that I don't essentially lose my deposit into the ether.

    TLDR:

    Basically, the question I'm asking is that when Company B purchased Company A and all its current contracts from the liquidator, did is also buy the debt for the deposit on my contract I'd already paid?

    Thanks!

  2. Post
    #2
    Can you not ask Company B what will be potentially due at completion? Would think they would be open about any deposits still attached to jobs.

  3. Post
    #3
    Fragluton wrote:
    Can you not ask Company B what will be potentially due at completion? Would think they would be open about any deposits still attached to jobs.
    I can, and that's my Plan B. Basically I get the feeling that they'll try it on either way and get me to pay the full contract cost. I just want to go into that conversation with a little knowledge on what the process usually is.

  4. Post
    #4
    Did you sign a new contract with Company B? What were the terms of the original contract? Are either of the Companies registered master builders? Did you take any insurance out for the build as part of the original contract?

  5. Post
    #5
    Company À was liquidated and contracts sold to B or the shares in A were purchased by B and A is continuing to operate?

  6. Post
    #6
    hoe_rag wrote:
    Company À was liquidated and contracts sold to B or the shares in A were purchased by B and A is continuing to operate?
    The first one, contracts sold to company B

  7. Post
    #7
    It really depends on the term of sale contract really... some deal do have their creditors carried forward, while others accepted the deal but fail to honour them... best to check with company B before making any move; or if possible check with company A's proprietor on their term of sale...

  8. Post
    #8
    hamsap wrote:
    It really depends on the term of sale contract really... some deal do have their creditors carried forward, while others accepted the deal but fail to honour them... best to check with company B before making any move; or if possible check with company A's proprietor on their term of sale...
    Yep dépend on the terms but must have taken on at least some of the obligation to fulfil contracts and honour advance payments made if no claim was made as à preferred creditor to company À.

  9. Post
    #9
    Contacted the liquidator and apparently while the terms of the purchase are confidential, they've told me that they didn't take on any obligation to honour existing contracts. Balls.

    Oh well, I'm just gonna have to ask if they'll be kind and do me a good deal so I can at least recoup a small amount of my lost money. Thankfully throughout the whole build, this is the only hiccup we've had and in the scheme of things it's pretty minor. Does suck though because it's probably gonna be best part of a grand I'm never gonna see again.

  10. Post
    #10
    I guess if they won't come to the party, any contract that did exist, isn't worth the paper it's written on if the deposit can just disappear... so you could at least shop around?

  11. Post
    #11
    Esprit wrote:
    Contacted the liquidator and apparently while the terms of the purchase are confidential, they've told me that they didn't take on any obligation to honour existing contracts. Balls.

    Oh well, I'm just gonna have to ask if they'll be kind and do me a good deal so I can at least recoup a small amount of my lost money. Thankfully throughout the whole build, this is the only hiccup we've had and in the scheme of things it's pretty minor. Does suck though because it's probably gonna be best part of a grand I'm never gonna see again.
    My ex-brother-in-law had this happen on a build and lost $70,000 deposit, it was through a franchise, but the franchiser didn't want a bar of helping out. In the end they found another builder, who squeezed the price down for them as a sign of good faith, and made the build happen. What was really shitty is that the franchisee that went bust wouldn't release the plans, and asked to be paid for them!

    Sorry to hear you are getting screwed, but if the guys that bought the contracts don't come to the party i'd say don't use them on principle.

  12. Post
    #12
    From the Master Builders website:

    Our Loss of Deposit cover protects you if your builder is unable to complete your building work and you lose your deposit.
    https://www.masterbuilder.org.nz/RMB...Guarantee.aspx

    Sure this depends on the builder being a MB and having taken out the right cover but when we build our bach the cost was minimal and the association helped us out at the end when the builder started becoming difficult over the quality of their work.

  13. Post
    #13
    bas wrote:
    From the Master Builders website:



    https://www.masterbuilder.org.nz/RMB...Guarantee.aspx

    Sure this depends on the builder being a MB and having taken out the right cover but when we build our bach the cost was minimal and the association helped us out at the end when the builder started becoming difficult over the quality of their work.
    ^^^^ This, unfortunately my BIL didn't really know about this and was not offered it by the builder.