Absolute Traffic Solutions, an Auckland-based traffic management company, has gone into liquidation owing more than $1 million to Inland Revenue, employees and other creditors.
The shareholders resolved on August 29 to liquidate the company, appointing Digby John Noyce of RES Corporate Services as liquidator.
“The company operated a transport management business based in Auckland, mainly providing services to the construction industry,” Noyce says.
“The company was unable to pay its obligations to Inland Revenue and for a time complied with a payment arrangement with Inland Revenue. When the company failed to make a payment under this arrangement Inland Revenue issued a statutory demand. The shareholders then resolved to liquidate the company.”
There were 85 employees at the date of liquidation, all of whom have had their contracts terminated.
According to the liquidator’s initial report, preferential creditors include employee entitlements of $452,383, PAYE of $192,880 and GST of $937,711 — a total of $1.58 million. Unsecured creditors are owed a further $446,472.
The company’s cash balance at liquidation was $150,355, with accounts receivable of $903,651. Physical assets include traffic management vehicles, equipment and signage, which the liquidator intends to sell with the consent of secured creditors.
“Our present view, based on information received to date, is that it is likely that a partial distribution may be available for preferential creditors, however recovery actions through insolvent transactions or other remedies may bring in additional funds, although it is still too early to express a view on such matters,” Noyce says.
Noyce says an investigation will be carried out to determine if any insolvent transactions have occurred or if there have been breaches of legislation.
“Where sufficient evidence exists, reportable breaches of legislation will be reported to the relevant authorities.”
The liquidation is still at an early stage, and no completion date has been set.
