Engelbrecht Group Ltd Enters Liquidation Amid Significant Debt

Engelbrecht Group Ltd, a scaffolding company based in New Zealand, has ceased operations following its decision to enter voluntary liquidation. This decision was made by shareholders Charl Engelbrecht and Ruan Engelbrecht due to financial challenges exacerbated by significant unpaid debts. The company owes approximately $150,000 to the Inland Revenue for outstanding Goods and Services Tax (GST) payments and an estimated $350,000 to unsecured creditors.

Founded in 2021, Engelbrecht Group primarily provided scaffolding services in the Auckland area while being directed by Engelbrecht, who also operated a separate business in Christchurch. According to an initial report released on October 28, 2023, by Brenton Hunt, an insolvency practitioner from Insolvency Matters, the company struggled with operational inefficiencies that contributed to its financial difficulties.

Hunt’s report revealed that a failed restructuring effort intended to merge the Auckland operation with the Christchurch business led to operational chaos. “Unfortunately, with the director being based in Christchurch, the Auckland business suffered with staff not properly working in the business and using the equipment for their own projects. This put financial strain on the business causing cashflow issues leading to the tax arrears,” Hunt stated.

As the situation deteriorated, Engelbrecht made the decision to close the business and liquidate its assets. Plant and equipment were sold, with the proceeds designated for secured creditors. Unfortunately, the funds raised were insufficient to cover all outstanding debts. Secured creditors include companies such as Safesmart Access, Flexicommercial, L&F Ltd, Bizcap NZ, Finance Now, Extrastaff, and Rapid Metal Developments NZ.

The unsecured creditors primarily consist of the IRD and ACC. At the time of liquidation, the company’s bank account held only modest funds, and there are no outstanding invoices for unpaid work. Hunt is currently investigating whether additional funds can be generated from the remaining plant and equipment.

While he could not confirm the likelihood of payments being made to creditors from company assets, Hunt indicated that the prospects appeared dim. The Engelbrecht Group’s liquidation serves as a cautionary tale about the complexities of managing operations across multiple locations, particularly when financial oversight falters.