Liquidator expects 50c or less payout

By ANNE GIBSON

Insolvent companies associated with 176 apartments at three holiday resorts have slid into full liquidation.

Unit owners have been told that an interim liquidation has changed to full liquidation.

Six broke firms were involved in the resorts at Rotorua and Queenstown, developed by companies associated with Auckland's Taradale Properties. The companies owe more than $1 million to unsecured creditors, but the liquidator is predicting people will get less than half their money back.

Paul Sargison and Gerry Rea, of Gerry Rea Associates in Auckland, were appointed interim liquidators by the High Court at Auckland on December 19, but they have now given notice of their permanent appointment as liquidators, vesting them with wider powers.

Shareholders of the six companies - including Taradale founder Tim Manning - appointed them, Sargison said.

This follows Manning's original application to the High Court on December 19 to have the companies that he part-owns placed in interim liquidation, an unusual situation which Manning said was caused because he had been denied full financial information on the companies and feared they were insolvent.

But fellow director and shareholder Garry McNabb, of College Property Management, denied this and pre-empted Manning's court action last year, filing a statutory demand for $470,000 against the Taradale companies, which developed the resorts. Marama Resort, Marama Leases, Greenstone Management, Greenstone Leases, Whistler Queenstown Management and Whistler Queenstown Leases are now in full liquidation.

The liquidators have given notice to units owners at the three resorts that they will stop managing the properties on Friday, leaving investors to strike their own deals over tenanting their units and generating income.

"In order to clarify the position regarding the lease of your unit to the company, we now formally advise that we have abandoned the contract as onerous property under section 269 of the Companies Act 1993," Sargison wrote to investors.

The section allows a liquidator to back out of any previous deals.

"This will save you from having to formally terminate the contract with the company, and leave you free to enter into any other arrangement for the ongoing management of the unit.

"The liquidators are continuing to manage the resort for the benefit of lease pool owners until February 28," he wrote.

"We are now preparing a detailed report that will be submitted to owners and other creditors of the company during March.

"This will detail, for owner and creditor approval, our proposals for distribution of the funds from trading the resort from December 19 to February 28."

Sargison said he expected less than 50c in the dollar to be distributed to creditors, but he had yet to quantify the number of unsecured creditors and how much they were owed.

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