Failures hit holiday resorts

By ANNE GIBSON

Six troubled companies associated with Taradale Properties are insolvent and are expected to be liquidated in the next few weeks.

Interim liquidator Paul Sargison said the companies, which had management contracts at three holiday resorts, would be wound up when the matter went to the High Court at Auckland on March 6.

He is yet to tally up total debts from lists of creditors, but will release a report at the end of the month.

Marama Resort, Marama Leases, Greenstone Management, Greenstone Leases, Whistler Queenstown Management and Whistler Queenstown Leases were put into interim liquidation last month.

The companies managed the resorts and guaranteed rental returns on 155 units at the Taradale-developed Marama Pt resort near Rotorua and at The Whistler and Greenstone Terrace in Queenstown, Sargison said.

The lease companies filed a statutory demand against the Taradale companies which developed the resorts late last year for $470,000, he said.

"This was money the lease companies said was owed for unpaid rental guarantees, because the developer was to make monthly payments to compensate the lease companies under the guarantee. Taradale disputed the amount and said payments have been made which offset this amount," Sargison said.

"Owners of units are pretty distressed, because a lot have taken out mortgages on the units, relying on the rental guarantees to pay instalments on the mortgages, so they are very unhappy."

Sargison expects the companies' assets to be sold: "The major assets are the management contracts and we are working with a number of parties to see if we can reach agreement with other management companies. This would allow the business to go on in a normal manner," he said.

"We've been fighting to keep the resorts going," he said.

Disgruntled investors in the three troubled vacation complexes called the Business Herald last week to say they had banded together to take legal advice after their "guaranteed" rental returns dried up late last year.

They are owed thousands of dollars in unpaid rent.

One Auckland-based investor who owned a property at the 78-unit Marama Pt said rent stopped in August. She paid $249,000 for the unit north of Rotorua after attending a promotional seminar: "I've learned that if it sounds too good to be true, it probably is."

Now she fears she could be liable to pay nearly $30,000 if she sold her unit because she says she will be lumbered with a tax liability. Sale of the units will incur GST, she said.

Selling the unit is also not an option given the problems with the property, she said.

Investors got letters late last year saying there were various problems at the three properties, including low occupancy rates which had resulted in the guaranteed rental returns not being paid.

Despite being a half-owner of the companies, Taradale founder Tim Manning of Auckland got a ruling in the High Court at Auckland last month to appoint an interim liquidator, claiming financial information was withheld and the companies were trading insolvently.

A fellow shareholder in the six companies and Manning's business associate, Gary McNabb, said there were difficulties between himself and Manning, but declined to elaborate ahead of Sargison's report.

But he said he had produced full financial information for Manning and it was only low occupancies and "other problems" which had caused problems with the rent.

But the manager of Greenstone Terrace, John Esdaile, said there were no occupancy problems in the 75-unit complex owned by 70 investors.

"I took over seven months ago and have turned this place around," he said, adding the complex was 90 per cent occupied and generating a weekly income of between $18,000 and $20,000.

Taradale has promoted the developments in brochures and on the web by telling investors of "unsatisfied demand for housing in the desirable holiday locations".

A Sydney-based investor who paid more than $200,000 for her Greenstone Terrace unit said she had taken it away from Greenstone Management and had signed a deal for a Queenstown real estate agent to tenant the unit. She was delighted with the $280/week rental income she had received since December 20.