Collapsed construction company Stanley Group may have acted illegally - liquidators

Liquidators for the collapsed construction firm Stanley Group say it may have acted illegally.

Stanley and associated business Tallwood face a $16 million deficit, with more than $9m owed to subcontractors.

And it's not just subcontractors who say they had difficulties - homeowners have too.

The Mangere Housing New Zealand construction site was one of the biggest of the projects Stanley and Tallwood took charge of before everything fell over.

"The directors have told me that they underquoted that by a couple of million dollars, and that really has been the anchor that brought them down," liquidator Damien Grant told Newshub.

Nearly 530 subcontractors are owed more than $9.5, with 50 creditors who have taken massive hits.

Then there's retention money - that's a stash of cash that's deliberately set aside in case the business goes belly up.

Under the law, it's supposed to be kept in a trust and not used for anything else. Liquidators say Stanley Group may have failed to do that.

"Under the law, you are meant to keep the money in liquid funds," Grant said. "The directors feel they did keep the money in liquid funds.

"I'm not entirely too sure I agree with them on that."

It's not just subcontractors with complaints. Newshub met Stan Baron and his wife, Dominique. Stanley Group was behind the reclad of their Te Atatu home.

"The stress that we had to go through," Stan said. "I have tears in my eyes - in my throat thinking of it.

"It was just pathetic."

He told Newshub there were cost overruns, subcontractors not being paid, and windows put in backwards.

And the worst part - discovering 912 individual nails, hammered through their new weatherboards - into nothing.

"The weatherboards were hanging to thin air," Stan said.

Eventually, after lengthy negotiations, they say Auckland Council forced Stanley Group to remove everything and start again.

"Personally, it was horrible," Dominique said. "We were very badly treated.
"We were insulted - we were bullied most of the time."

When contacted about the claims, director Kevin Stanley did not comment.

Stanley Group was contracted to work on eight houses along a street in Auckland's Te Atatu, and it's not just the Barons who encountered serious issues.

Newshub has spoken to another resident here, who also claims bullying and shoddy workmanship with tradesmen who were not being paid.

"The way they treat their clients and the way they treat their staff and subcontractors is not on," Stan Baron said.

The couple says they had to get other builders to finish the job and lost hundreds of thousands, but won't take it any further.

As for the subcontractors out of pocket after the Mangere job - they're planning to launch a legal fight against the Stanley Group directors.