Background
Jeti Services* was an electrical contracting company that operated in Auckland. The company took on projects of all sizes, from simple residential builds to complex developments.
Jeti Services* was impacted by the COVID restrictions in 2020. The closure of sites and impact on cashflow was immediate, this external pressure combined with a dispute on a large development impacted the company’s bottom line. The shareholders of the company then decided to place the company into liquidation.
Our Appointment
Once appointed, we assessed the situation and worked out the most efficient way to realise the company assets. A key issue faced was that a large amount of stock was secured to a specific supplier. Given they had first right to this stock, we entered into discussions with the supplier and negotiated a path forward for us to return any unused stock and account to them for any installed. This left the fixed assets and accounts receivable, over part of which there was a priority question to determine.
Next Steps
As we were unable to sell the business as a going concern, this left us with fixed assets and debtors. The fixed assets were tools and a large number of fleet vehicles. The tools were sold by way of an onsite auction to minimize the cost of moving and sorting them. With 14 cars, however, and a buoyant market for trade vehicles, we elected to prepare the cars for sale and store them in our North Shore warehouse. We were able to prepare the cars for sale (remove signwriting), list them online and store them (at no additional cost to the insolvency). We then were able to quickly sell them at fair market value without the need to pay auction commission or car yard fees.
Result
The pop-up car yard was an extremely effective way to sell the company’s vehicle fleet and made use of our North Shore warehouse to keep the process in-house and save on sale commissions.
Waterstone is not afraid to think outside the box when it comes to insolvency appointments or too precious to put in the hard yards if we see a potential solution and benefit to the creditors.
*Name changed
