Here is a story which illustrates the worst of the construction industry.
On the heels of it’s largest construction company (Fletcher Building) being branded as a “serial under-performer”, New Zealand’s construction industry has suffered another major blow as we hear Ebert Construction company has gone into receivership.
If you are a frequent reader of this blog, you know that globally, construction companies are struggling, and despite being on the other side of the World, New Zealand is not immune.
We first learned about Ebert in January of this year. A report from Newshub.co.nz told us that employees of the company learned of it’s company’s demise through the media.
The Newshub story also reported that subcontractors like Hardware Direct were being exercised by Ebert right up until the day the announcement was made. Hardware Direct, who claims to be owed $180,000 by Ebert, was called to a job-site to correct non-compliant work only to learn Ebert had declared bankruptcy.
Ebert’s fall is said to impact as many as 15 major projects in New Zealand. According to Lexology, Ebert was under contract for projects including; Indian High Commission’s new headquarters in Wellington ($30M), the Union Green apartment development in Auckland, a unit at Middlemore Hospital, a new commercial building for Premier in Carterton, and a diary processing factory in Pokeno.
In total, it is estimated that Ebert has over $40Million in debt.
And while Rome was burning…
We learn from an article in July in www.stuff.co.nz that Ebert’s Managing Director Kelvin Hale was busy building a multi-million dollar mansion for himself.
The land was purchase in 2014. Hale started construction on the project in 2015. According to the report from stuff.co.nz, the project was still ongoing with signs of activity as recently as July of 2018.
Hale and founding partner Dennis Ebert who have major interests in several other companies and developments around New Zealand are now under immense pressure. This month stuff.co.nz reported that Richard Burrell a family member of a sub-contractor reportedly owed $700,000 by Ebert raised a billboard on the Wellington motorway calling for Hale and Ebert to pay back it’s sub-contractors.
It’s unlikely that these efforts will compel Hale and Ebert to do the right thing.
Hale and Ebert are the epitome of greed. Not only did they manage one of New Zealand’s largest construction firms into the ground, they were careless about the people that depended on them.
Running any kind of business is risky. It’s possible for anyone to experience a business failure, but if you are an individual of high character, you don’t spend lavishly while the company is failing and you certainly don’t let your employees and business partners spend time and money they could never hope to recover.
What do you think? Did Ebert and Hale handle this right? Do you think they were unaware of how bad things were? Have you ever been involved or impacted by the liquidation of a business? Tell me your stories.
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