A Whakatāne road transport company has been put into liquidation owing Inland Revenue almost $700,000, while other local businesses face similar processes.

DPS Haulage Limited was placed in liquidation on June 11 by the Rotorua High Court, following a petition by the IRD because of unpaid tax debt.

The company managed logging and road transport services in Whakatāne and Gisborne, with assets leased from another company, which is also in liquidation and is owned by the same people.

An initial report by PricewaterhouseCoopers (PwC) liquidators summarised the director’s explanation that the pandemic and last year’s cyclone caused revenue to drop.

As a result, the company faced cashflow constraints.

Attempts were made to generate cash by selling assets, but DPS Haulage could not raise sufficient funds to repay its debts.

Liquidators identified 10 secured creditors owed an undisclosed amount, and one unsecured creditor owed an estimated $103,337.

IRD has filed a preferential claim for outstanding GST, PAYE and other related employee deductions to the tune of $694,660. The court has awarded costs of $1625 to the IRD.

DPS Haulage did not employ anyone at the time of liquidation, and liquidators did not understand there to be any money owing to former employees.

PwC recovered $342,553 from unpaid accounts owed to DPS Haulage which could go towards paying creditors’ claims, but it left a shortfall of $830,462.

Further liquidators’ reports are expected six monthly until completion of the liquidation process.

Cajja Logistics Limited was placed in liquidation by its owners after trading company DPS Haulage, which it leased trucks, trailers and equipment to, did the same.

Liquidators appointed from McDonald Vague released their first report recently, which stated that the trading company owed “a large amount” to Cajja Logistics.

“Without the realistic prospect of work for the company’s equipment and machinery, and an uncertain future in regard to the recovery of the debt owed to it, the company director and shareholders decided to liquidate this company.”

Liquidators estimated that Cajja Logistics owed about $180,000 to the IRD, but they had not received a claim from the department at the time of writing their report.

Five secured creditors and a number of unsecured creditors have been identified, with approximately $120,000 owed to the latter.

Liquidators could not estimate how long it would take to complete the liquidation process, which relied on the selling of the company’s assets.

The liquidators considered that the value and/or sale estimates of the company assets was commercially

sensitive.

A third related company, DPS Mechanical Limited, has also been placed in liquidation.

McDonald Vague liquidators expected the process for the latter organisation to be completed within six months.

Another company registered in Whakatāne – Simian Property Investments Limited – is facing liquidation, with an application filed at the Rotorua High Court last month.

A hearing is scheduled for September 10 for the High Court to hear the application.

Another Whakatāne business was placed into receivership last month.

The Strand Cafe has recently reopened under new owners after being placed in receivership on July 18.

Accountants from BDO Tauranga were appointed as receivers and managers of the company.

A sign was taped to the cafe’s door stating that the business was for urgent sale, with expressions of interest required within six days.

It was closed for two weeks.