Mangawhai Developments in receivership for second time

Mangawhai Developments has been put in receivership a second time after the original secured creditor, Doug Somers-Edgar, sold the debt to two of the original shareholders.

The company developed a lifestyle subdivision north of Auckland but it failed in 2009 and was put into receivership.  

Digby Noyce of RES Corporate Services was appointed receiver of what's left of Mangawhai this week by Tuppence Loans, owned by Darren Wallbank and Philip Cotton, Tuppence Loans bought the debt and took assignment of the security about a year ago.

Messrs Wallbank and Cotton owned 33% of Mangawhai through a company called Capstone Investments. The majority shareholder is controlled by Mangawhai director Kasman Daniel.

Mr Cotton confirmed Tuppence had bought the security from Matrix but declined to make further comment, saying "a lot of people lost money, like us."

Mr Noyce says the second receivership is in reality a wash-up by Tuppence, seeking to realise its security. He hadn't yet ascertained how much is currently owing from Mangawhai Developments.

According to reports by Matrix, as mortgagee in possession, $13.7 million was owed at January 2013, which had grown to $15 million a year later.

When Matrix was the secured party, the collateral was described as the building contract for the development including certificates of title. But a later one by Financial Trust, a Matrix entity that assigned the interest to Tuppence, cited only the building contract.

Mangawhai Developments was originally placed in receivership  by Matrix Custodian, part of the Somers-Edgar group now known as Waiwera Canyon, which was owed $9.1 million.

Mangawhai Developments was originally formed in 2005 to develop the 47 lot Lake View estates subdivision on Devich Road, Mangawhai, and sold 33 lots but only six buyers settled and others were chased through the courts.

Exactly who was liable for the debt had also been fought through the courts.

A March 2010 High Court judgment found that Kasman Daniel, whose company Green Planet New Zealand had guaranteed the loan from Matrix when he invested in the company, was liable for the $9.1 million plus default interest of 14%. It said creditors the previous year had accepted a proposal from Messrs Wallbank and Cotton to each repay $500,000 over five years.

When the receivership ended in December 2012, just $1.4 million had been paid to creditors from lot sales.

Matrix then took possession of the development's 29 lots, and according to an NBR report last October, sold 22 to Somers-Edgar personally and seven to third parties.

Somers-Edgar, a former NBR Rich Lister, didn't return calls. That report says the loan was originally assigned to Matrix on behalf of Orange Finance, also owned by Somers-Edgar, which went into receivership in 2012 owing investors about $7.5 million.

(BusinessDesk)