Some New Zealand Northland trucking companies could be forced out of business while chasing hundreds of thousands of dollars owed to them by logging contractors. Source: The Northern Advocate
HarvestPro and Smith and Davies NZ who have gone bust, owe a string of creditors more than NZ$26 million.
The board of directors of HarvestPro New Zealand and Smith and Davies NZ – both 100% owned subsidiaries of Kiwi Forestry International – are proposing to pay non-secured creditors 20 cents (NZ) for every one dollar of debt as a full and final settlement to be paid within 20 working days of its approval.
But the proposal will only go through if 75% of creditors say yes through a postal ballot.
Both companies owe secured creditors GE Finance, Mercedes Benz Financial and Itochu Corporation NZ$24.9 million.
The former two have repossessed assets of HarvestPro New Zealand and Smith and Davies NZ and have yet to determine the recovered amount.
HarvestPro New Zealand’s unsecured creditors are owed NZ$1.8 million but will only receive NZ$259,584 if they agree to the proposal.
The company’s sub-contractors in the Far North were forced to lay off about 100 forestry workers two weeks ago while all 120 staff of Smith and Davies NZ in Whangarei were laid off on March 16.
Smith and Davies NZ owes its unsecured creditors NZ$1.7 million, including NZ$192,916 to seven Northland trucking firms.
Allan Thompson is owed NZ$38,939, DN & AF Carter NZ$41,844, Klutches Haulage NZ$23,247, Northland’s Truck Centre NZ$29,312, SJ Reid NZ$25,107, Turners’ Transport Services NZ$19,044, and Whareora Log Transport NZ$15,423.
Dave Sills, whose only truck was contracted to Smith and Davies NZ, said the impact on small businesses such as his had been huge.
He worked at Smith and Davies NZ as its fleet manager until last year and questioned how a company with heaps of security and millions in assets could suddenly go belly up.
“We (trucking companies) were not officially told what was going on in the lead-up to people losing their jobs,” he said.
Mr Sills will only receive NZ$5862 if he agrees to the proposal.
Another affected businessman, Simon Reid of SJ Reid, said he received a text message from Smith and Davies that there would be no work the next day followed by a “terse” note 10 days later notifying him of the termination of his contract.
“It (debt) is not going to break us but other guys with one truck will possibly be knocked out of business. It’s pretty rotten for them to make us work the whole time, then to say one afternoon there’s no work,” he said.
The board of directors of both companies, Andrew Chalmers and Zane Cleaver, neither replied to messages nor answered written questions by edition time.
Their appointee to facilitate the proposal, Brent Hempel, refused to comment when contacted.
“I am not authorised to speak. We’re in the middle of a process and it’s not an opportune time to talk,” he said.
The board said the creditors would get a chance to recover some debts under the proposal.
If a liquidator is appointed, the creditors have a right to take action against the directors of both companies for, among other things, breaches of duty.
