NZ Family’s $1M Nightmare: Builder’s Bankruptcy & Calls for Law Change
Auckland, New Zealand – An Auckland family’s six-year battle to complete their new home has exposed what advocates are calling critical weaknesses in New Zealand’s bankruptcy laws. Andreas and Anna Goetz are now speaking out after a builder they hired declared bankruptcy, halting payments owed to them despite a court order and a personal guarantee.
The Goetzes won a District Court decision against builder Mike Greulich, ordering him to make regular payments following stalled construction on their Ōrewa home. They had loaned Greulich’s company, Izodom Homes, $120,000 to finish the project, securing a personal guarantee from him for the debt. Although, payments ceased after just $3,950 was received when Greulich filed for bankruptcy in .
The couple’s ordeal began six years ago with the purchase of land in Ōrewa, intending to build a passive house – a structure designed for ultra-low energy consumption. The project quickly became plagued by delays and cost overruns, compounded by a separate leaky building issue with an apartment they owned. At one point, the financial strain was so severe that the family limited themselves to one meal a day to ensure their two young sons were fed.
“It sends a message that [the Official Assignee] has no teeth to manage bad debtors,” Andreas Goetz told the Herald. “And they can easily continue causing more financial waste and harm to everyone without consequence.” The Goetzes estimate they are now $1 million poorer and face the potential loss of their home.
The case has drawn the attention of NZ Initiative, a business-funded lobby group, which argues the situation highlights a “structurally broken” system. Oliver Hartwich, executive director of NZ Initiative, stated that hundreds of millions of dollars are left owing annually to families, tradespeople, and the tax department. The group is advocating for changes to the Companies Act, pushing for directors to be compelled to initiate liquidation proceedings more quickly, preventing the accumulation of substantial debts.
Greulich, however, paints a different picture. He claims he spent $85,000 of his own money and incurred a $60,000 company overdraft attempting to complete the Goetzes’ build. He attributes the project’s failures to Covid-19 lockdowns and errors made by other builders he engaged. He alleges that the Goetzes refused to renegotiate the fixed-price contract when building material costs increased by 40% following pandemic-related delays.
He as well claims he was pressured into signing the personal guarantee, a decision that reportedly caused conflict with his then-wife. Greulich denies allegations of concealing income by working through a company now in his ex-wife’s name, stating he sought permission from the Official Assignee to do so in order to make “structured repayments,” but was denied. He maintains that his ex-wife is currently providing him with financial support, covering rent, living expenses, and pet care.
“He ruined my whole life,” Greulich said, attributing his current unemployment to the bankruptcy. He added, “I haven’t done it on purpose, not to pay him. I did it since I couldn’t any more.” He has recently been granted permission by the Official Assignee to operate as a sole trader under accountant supervision and is seeking new projects.
The Official Assignee, Kelly Serrant, regional manager of the Government’s Insolvency and Trustee Service, stated that the office acts impartially and in accordance with the law, and is currently monitoring the case. However, she declined to comment on specifics due to privacy concerns.
The Goetzes’ experience underscores a growing concern about the ease with which individuals can declare bankruptcy, potentially shielding themselves from financial obligations. The couple hopes their story will contribute to legislative changes that provide greater protection for creditors and ensure a more equitable outcome in similar situations. Andreas Goetz expressed a desire for his family’s struggle to result in fairer laws, stating, “If One can change the laws, then that would be my legacy.”
The Goetzes persevered through the ordeal with the support of friends who provided volunteer help and food vouchers. Andreas Goetz took on tasks like plastering and waterproofing himself to advance the project. The bankruptcy is set to expire in , and the Goetzes are seeking an extension until the debt is fully repaid.