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Lane Walker Rudkin - Source: ONE News -
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Failed Christchurch clothing firm Lane Walker Rudkin owed the Westpac bank over $111 million when it was placed in receivership in April.
Lane Walker Rudkin, one of the oldest brands in New Zealand and once the manufacturer of All Blacks jerseys, was placed in receivership in April at the request of the bank.
The size of the bank debt of Lane Walker Rudkin and its seven subsidiaries was revealed by the firm's receivers BDO Spicers in its first report to the Companies Office on Monday.
National Distribution Union president Robert Reid has criticised not only Lane Walker Rudkin, but also Westpac which he says took its "eye off the ball".
"How Westpac could lend the company that much money and now be in debt, and there's no asset backing for that, is beyond belief," he says.
The company also owed around $2 million to staff for holiday pay and redundancies, over $960,000 to the Inland Revenue Department and over $6 million to unsecured creditors - a total debt of $121 million.
Following its placement into receivership, some 186 staff were made redundant without holiday pay or redundancy.
Reid says redundant staff, along with the IRD, are first in line for recovered money, but just how much they will get is unknown.
BDO Spicers say in their report that the standard of financial reporting and corporate governance at the firm have, in its view, been inadequate for a company of its size and have been significant factors in the company's under-performance and entry into receivership.
The Lane Walker Rudkin group of companies is owned by Christchurch businessman Ken Anderson who bought the company in 2001.
News that LWR owes $121 million, most of it to Westpac, has angered the redundant workers, who have still received no money from the company.
"Why was that allowed to happen? We haven't had any answers, no explanations, no information," says Dianne Bradshaw, one of the former LWR workers.
Most are owed around $8000 and they need their money.
"It's been nine weeks this Friday. People are struggling," says Jack Taylor, a former LWR worker.
Workers say they have had no explanation from Anderson and nothing from Westpac, which was also not talking to ONE News on Tuesday.
