Creditor seeks ‘stronger’ receiver

A large creditor of failed Wellington construction company Armstrong Downes Commercial is trying to replace the liquidators with someone with ‘‘some teeth’’ to ensure subcontractors get paid.

Armstrong Downes (ADC) shareholders had appointed David Ruscoe and Russell Moore from Grant Thornton as liquidators. However, Lower Hutt developer Kevin Melville, whose High St Holdings 2020 Ltd was a client, said he wanted to replace them with Damien Grant of Waterstone Insolvency as the new liquidator.

‘‘He doesn’t care if people don’t like him, he’s going to go after these guys, and I think that’s the right thing for the subbies, end of story,’’ Melville said. ‘‘I just want a stronger receiver with some teeth that’s going to bite into Tony [Doile] and Simon [Taylor].’’

ADC had two directors, Doile and Taylor. Its shareholder, 2 HB Ltd, was owned by Doile and Yellow Roof Trustees, which was in turn owned by Taylor and Lower Hutt lawyer Eugene Collins.

Melville, through Brent Norling of Norling Law, proposed a creditors’ meeting to vote on replacing the liquidators with Waterstone. ‘‘I just want to see these guys chased for some of their assets,’’ Melville said.

It was possible Ruscoe would vigorously pursue the shareholders, but said he had lost confidence in him.

In a letter to creditors, dated May 23, Ruscoe said the liquidation was only three weeks old, and the priority had been to secure sites and assets.

Court action would come at a cost to creditors, and being ‘‘aggressive’’ and ‘‘robust’’, as Norling described Grant, ‘‘doesn’t necessarily mean that the best decisions are made’’.

Norling said a creditors’ meeting, which liquidators decided not to hold, would have been a chance to review the liquidators’ appointment and their plan.

They also took issue with the shareholders’ appointment of the liquidators, claiming it was common for liquidators appointed in such circumstances to be ‘friendly’ to the shareholders that appointed them.

Ruscoe said a creditors’ meeting would have been expensive, and a range of creditors, including High St, had indicated they saw no value in incurring that cost.

There was nothing sinister in shareholders appointing liquidators, and it could take months for a court to appoint liquidators, he said.

ADC went into liquidation at the start of May, owing $9.2 million to 320 unsecured trade creditors and $2.8m to secured creditors. It had eight projects on the go in the Wellington region, including the $125m residential development, and a 40-apartment project. A meeting would be held by June 13, Ruscoe said.