Contractors owed money by a Queenstown property developer say they were chasing payments long before the related entities went into liquidation, describing disconnected phone lines and a quiet construction site. 

“We get so sick of these people,” says a manager are Safety Nets NZ Ltd, which is also owed money in the Du Val Group statutory management. “It happens all the time where they claim they’ve gone broke, and then they start another company and keep trading while all their contractors get ripped off.”

Formcrete Construction, Falconer Corporate and two connected companies were placed in liquidation by the High Court at Rotorua, by application of Inland Revenue. Formcrete and Falconer, which both list Nicholas ‘Dean’ Franklin as the sole shareholder and director, jointly owe $8.6m to creditors, including $3.6 million to the Inland Revenue Department. 

Formcrete had been developing small blocks of apartments and “exclusive” villages at several locations around Queenstown, including at Jack’s Point at the foot of the Remarkables. Six of these developments were being marketed and sold by Falconer, whose website says the company creates “bespoke developments in Aotearoa’s most aspirational destinations”. 

Questions sent to Franklin were not answered by the given deadline. Although a spokesperson for Franklin told Newsroom that non-governmental creditors have been paid, the two businesses spoken to by Newsroom had not received what they were owed at the time of writing. Julia Franklin, who is listed as a sales manager for Falconer, hung up on Newsroom when asked questions about the future of the unfinished developments.

Business consultant Matthew Blomfield provided comment on behalf of Franklin, post publication, stating all developments linked to Falconer and Formcrete are progressing toward completion, with construction ongoing across all sites.

He acknowledges speculating about the state of work at Clubhouse Lane but says the team has been focusing on completing interiors and final touches on the first building, which is now ready for handover.

“To clarify, Formcrete was a subcontractor that ceased trading several months ago. It paid all staff and the majority of its creditors prior to liquidation. For the few remaining legitimate creditors, most have now either been settled or are in the process of being contacted for resolution.”

Jared Booth and Tony Maginness, from Baker Tilly Staples Rodway, have been appointed to the liquidation of Formcrete and have fixed August 6 as the day on or before the creditors are to prove their debts or claims.

Their first liquidators report, published on July 2, says the amount owed to secured creditors and the number of them is unknown, while close to $2.5m is owed to IRD and $5m is owed to unsecured creditors including trade creditors, tool accounts and loans. Included in the report is a list of 30 creditors, including scaffolding companies, building companies and three legal firms.

Craig Sanson, and Malcolm Hollis, PwC directors, have been appointed to act as liquidator for Falconer, Founder Corporate and SR Corporate, all of which have Nicholas Franklin listed as the sole shareholder and director.

A liquidators report has not yet been published for any of these three companies, but Sanson tells Newsroom the pair are attempting to contact the director to arrange a meeting to discuss Falconer’s affairs.

“As per the Inland Revenue’s Statement of Claim dated 11 September 2024, the company owes $1,114,059 for unpaid taxes. This consists of $699,249 for GST and $414,810 for income tax. These amounts include penalties and interest,” he says.

Further information about Falconer will be available in the first liquidators report, due for filing with the Companies Office at the end of July.

One of Formcrete’s creditors is Safety Nets NZ, a Christchurch-based company that provides fall arrest safety net systems predominantly for construction sites. A spokesperson says while they always had to chase Formcrete for late invoices, Safety Nets had been paid up until the final job they carried out at Clubhouse Lane, a development of 28 apartments in three separate blocks at Jack’s Point. At the time of writing Safety Nets is owed a little less than $4,000.

“It’s not very much at all … but I feel like we have to go through the process because then more debt gets loaded against them, and it’s more legitimate.”

Work for Formcrete had been sporadic, but the Safety Nets spokesperson says the company was always demanding and wanted the work done urgently.

With emails going unanswered and phone calls ringing through to voicemail or disconnected numbers, the spokesperson says the company asked its Queenstown contractor to return to the construction site a few weeks ago to track down the money owed in person.

“It was a bit like a ghost town. We’ve still got gear in there, which he’s been instructed to go and get it out, because clearly we’re not going to get paid.

“There were still a few tradespeople there and he spoke to a builder … they also have a different company and he got me an email address for that company, but no one ever responded to my email.”

The company that the Safety Nets staff were told to email is called FCM Limited, which was incorporated in 2023 and also has Nicholas Franklin listed as the sole director and shareholder. The Safety Nets spokesperson said it seems likely building at the site could continue with FCM at the helm.

Eli Fynn, of Queenstown Scaffolding, is another listed creditor of Formcrete who holds little hope of receiving the money he is owed for works done on Clubhouse Lane. He says his unpaid bill comes to just $390, but he put through a claim anyway because of the way he was pressured into dropping everything for a rushed alteration.

Post publication, Newsroom has been informed that Queenstown Scaffolding was subcontracting to another company, Barnetts Scaffolding, whose responsibility it was to settle payment. This “confusion” has been rectified and the invoice paid.

It’s not the first roadblock that construction at Clubhouse Lane has encountered: in May 2024 two buyers of the pre-sold residential units took the developer to court after it attempted to hike up the costs of the units and purported it would cancel contracts for those who refused to stump up.

The unit owners lodged caveats over the head title of the development in response to Formcrete suggesting increased costs associated with Covid were a “force majeure” event that justified raising the prices of the units sold. One of the two units in question was bumped 18 percent in price and another by 37 percent, taking the buyer’s unit to $1,094,000.

At the High Court in Invercargill, associate judge Owen Paulsen refused to lapse the caveats and said he was satisfied by the applicants’ evidence that construction wasn’t prevented or impractical at any stage.

Last week local news outlet Crux reported that Jack’s Point residents had been sent an email clarifying “speculative” media comments and explaining that the liquidations were part of a broader strategic clean-up of historical financial matters.

It said the liquidations had no impact on projects he was leading in Queenstown, including at Jack’s Point.

“These companies were no longer central to Dean Franklin’s current operations.

“All current projects are held in separate, solvent entities with secure funding and remain on track for delivery.”

According to the Companies Register, Nicholas Franklin is an active director of more than two dozen companies, and has links to 10 more properties that are in liquidation.

Clarification: Since this story was published, Newsroom has been informed that Queenstown Scaffolding was subcontracting to another company, Barnetts Scaffolding, and that the unpaid invoice had been sent to Formcrete in error.