Embattled Christchurch home building company Williams & Co has been placed into liquidation in the High Court at Christchurch, after much adverse publicity regarding its failure to meet timeframes and rising debts – estimated to have escalated to over $2.5 million.
Business Day has covered the plight of several of the company’s clients. Bar owner Lu He paid $110,000 (a $64,000 deposit, plus extras) to Williams & Co for a turn-key package last year. While many of Williams & Co’s clients have a BuiltIn guarantee backed by CBL Insurance, the guarantee over Lu’s contract is in the name of Williams & Co. As such, Lu is unable to call on the guarantee and is an unsecured creditor, which means that he sits at the back of the line for recovering his deposit and is unlikely to be paid in full.
In our recent blog article ‘Large deposits a risky business’ we covered the risks associated with placing sizeable deposits. As well as losing a deposit once a company goes under, any guarantee in the name of the company is likely to become worthless. Accordingly it is vital that consumers do their due diligence as to a company’s financial health before signing on the dotted line, and ensure that the benefit of any guarantee lies with the correct party and that there will be no restrictions should it be called on.