Mainzeal liquidator facing off with related companies over tangled affairs
The liquidator for the failed Mainzeal construction group is preparing to face off with several related entities over some "highly intermingled" transactions.
BDO's Brian Mayo-Smith, Andrew Bethell and Stephen Tubbs are chasing $46.6 million in related party debt in separate actions as they try to untangle the effects of two significant restructures two years prior to the collapse that had a "significant impact on related party positions," they said in their second report. The liquidators have received claims totalling $106.3 million and say they believe there are a number who have yet to file a claim.
The liquidators attempted to settle a $27 million debt owed by Chinese-registered Richina China Pacific Investments relating to a prepaid goods arrangement, which arose from the restructuring, though those discussions have since ceased, they said in their report.
Mayo-Smith, Bethell and Tubbs have applied to liquidate Richina Global Real Estate over a $15.2 million debt assigned to Mainzeal Group in December last year which they considered wasn't valid, and a hearing is scheduled in early October. The liquidators are also supporting receivers Colin McCloy and David Bridgman of PwC's application to wind-up Isola Vineyards over $6.6 million in related party debts.
In June the liquidators won a High Court order to pool the affairs of a raft of Mainzeal companies into one administration, and require Richina Global Real Estate to contribute $20.9 million and Isola Vineyards $2.5 million to the liquidation. Mainzeal principal Richard Yan has filed an 'out of time' application to strike out that order, which is set for an initial court date late next month.
"The quantum of any distribution to unsecured creditors will depend on the liquidators being able to achieve significant recovery from RGREL (Richina Global Real Estate), IVL (Isola Vineyards) and CHC (Richina China Investments Pacific) as well as other causes of action available to the liquidators," the report said. "If the liquidators are not successful the quantum of a dividend (if any) is not likely to be substantial."
The liquidators were appointed less than a month after one of its primary trading arms, Mainzeal Property and Construction, was placed in receivership on Waitangi Day. Receivers McCloy and Bridgman are expected to file their second report on or around Oct. 12, and the liquidators understand the sale of a property will satisfy the amount owed to secured creditor and the appointer, Bank of New Zealand, excluding a performance bond. BNZ was owed $9.6 million by 200 Vic Ltd, a Mainzeal entity, and a further $2.8 million from another related party.
The receivers' first report in April showed the Mainzeal companies owes $70 million to unsecured trade creditors, of which $51.7 million is accounts payable and $18.3 million in retentions held.
Employees are owed $5.2 million and the Inland Revenue Department is likely owed $600,000, and there are contingent liabilities including $33.5 million in contractor bonds.