Employees of Kitchen Things have received their full preferential entitlement, the liquidator and receiver for the organisation said.
Kitchen Things, a nationwide premium kitchen and laundry appliance company, has announced it has gone into receivership due to ongoing trading losses.
Russell Moore, Stephen Keen, and Adele Hicks of Grant Thornton New Zealand have been appointed as receivers.
Keen said the Kitchen Things staff received their full entitlement on Thursday.
“We’re really pleased with this result,” he said.
“Being able to provide the full entitlement to employees isn’t always possible, as it depends on the level of recovery appointees can make during the liquidation or receivership process.”
Keen is also the appointed liquidator for SolarZero, which was put in liquidation last year. The decision was made after the company experienced unsustainable operating losses and liquidity issues, rendering it unable to continue trading as it currently operates.
Along with Kitchen Things staff, employees of SolarZero have received their full preferential entitlement.
“In both cases, the recoveries made so far have meant we can pay employees the full amount of their respective entitlements under schedule 7 of the Act.”
Keen recognised that the SolarZero staff had experienced a longer delay.
“Some appointments are more complex than others. The recoveries needed to fund the distributions to employees can take months to work through. In the case of SolarZero, this involved complex tax recoveries and a slower sale of solar panels to avoid flooding the market and reducing their retail value.”
However, many customers have been frustrated to discover they are unsecured creditors without any stock assigned to their orders.
Keen explained that when a retail business fails, receivers face “tough challenges” regarding who has rights to the stock.
“The tracing requirements of specific items to customer sales orders are complex and time-consuming, often resulting in issues where the tracing cannot be completed because the product is not held by the company, which means the customer is the one to lose out,” Keen said.
“Under the Companies Act 1993, employees of insolvent businesses are to be prioritised ahead of unsecured creditors; now that we’ve achieved this milestone for Kitchen Things’ employees, our goal is to ensure the best outcome for all stakeholders through the sale of stock and assets.”