Righthouse goes wrong
The collapse of RightHouse has seen customers left in the lurch, which an Auckland company is attempting to ease.
When home insulation and heating company RightHouse called its staff into their offices on February 4 to inform them that the company was going into receivership, Roy Maddox’s phone “started ringing immediately.”
Wellington based RightHouse was perhaps known best for Government-subsidised home insulation projects around New Zealand. Yet the company, sold by Meridian Energy four years ago to UK-based Mark Group, had other strings to its bow including home heating and solar energy.
According to Roy Maddox, CEO of SolarKing, it was initially staff employed in the solar part of RightHouse that picked up the phone, then customers.
“It’s been a right debacle,” he comments on the collapse, and he doesn’t think it was the solar part of RightHouse that was responsible as the market is very strong.
He is leading the charge by supporting solar customers and staff of the failed firm. “Customers were calling and there was no response from PwC about it. “We are one of the leading solar companies and we can’t have this in the industry.”
The company had 189 staff and bases in Auckland, Hamilton, Wellington, Christchurch and Dunedin. All those closed and even the website went offline.
“We have started a solar helpline; 0800 110181. People affected can call and we will do all we can to help in solar. It’s for staff, customers, anyone.”
He admits it is not clear how many solar customers are affected, but will treat any enquiry on a case-by-case basis. “We’ll go nationwide. We’ll do our best.” Already a number of customers have contacted SolarKing.
Gerald Shelton paid almost $1,900 to RightHouse just a week before they went bust. The deposit was a hefty chunk of the overall price he agreed for a solar system on his Porirua home. He tried the liquidator, didn’t hear back, then got in touch with SolarKing.
They quickly came to the party, agreeing to install the same spec system, match the price and knock $1,400 off to help ease the pain of the lost deposit, he says. “They may be able to do it at a better price anyway, but they are giving people a lot of trust in the industry. It has taken the sting away from it,” says Shelton.
Other customers with a partially finished solar system may be able to get equipment installed at cost.
Roy Maddox believes the home insulation side of the business dragged down the rest. “It’s a boom bust created by Government subsidies,” he claims.
Certainly RightHouse was one of the key partners of the Warm Up New Zealand programme managed by EECA. That changed from a general scheme to one with a smaller budget targeting less than a quarter the number of homes, leaving a big revenue hole. General manager residential at EECA, Robert Linterman, confirmed that RightHouse’s subsidy money suffered a significant cut.
RightHouse had been losing money for four years anyway and the parent, who last year announced job losses in the UK and earlier this year closed US offices, was not in a position to keep propping things up.
The company had diversified into home heating, consultancy and solar energy projects more recently. However Liquidator John Fisk of PwC confirmed that home insulation was still the mainstay of the business.
And while he believes that around thirty customers could be affected by the liquidation, a RightHouse employee who lost his job in the collapse claims it is “far more than that”. Within days of the company going to the wall, SolarKing had already been in contact with over twenty customers who had either lost deposits, were only part way though an installation, or had a faulty one.
John Fisk advises anyone who has lost out to contact Pricewaterhouse Coopers to make a claim. That, he admits, would make them an unsecured creditor and at the back of the line for a payout if there is one. Customers who lost deposits were not even listed in the liquidator’s initial report.
The insulation side of the business was sold a week after RightHouse went into liquidation. Yet it may take until mid-March at least to get a clearer picture and at least 6-12 months for anyone with a lost deposit to see any of their money back.
In the meantime, Roy Maddox is happy for the phone to keep ringing and is keen to reassure solar customers that the industry will look after them.