Mainzeal sub-contractors miss out

Money that Mainzeal Property & Construction owed to its staff, a trading bank and Inland Revenue has been largely repaid.

But subbies look to be left out in the cold with little hope of getting their $106.2 million back.

Colin McCloy, joint receiver of Mainzeal Property & Construction and Mainzeal Living with David Bridgman, indicated three parties including the BNZ had received about $17 million.

The money had been largely repaid so the receivers' roles were almost completed, McCloy said yesterday.

PwC was appointed on February 6 last year and McCloy said close to $11.3 million owed to the bank had been repaid as well as the $5.3 million owed to Mainzeal staff in wages, salary and holiday pay and $600,000 owned to IRD.

The receivers recovered that - and more - via sale of property and receivables (money owed to Mainzeal) and the sale of plant and equipment including cranes, vehicles, portacom buildings, tools and other items, McCloy said.

A number of former employees were engaged on a casual or contract basis to help with recovering money and other matters, McCloy and Bridgman said, paying tribute to those hurt by the fallout.

"We recognise this is an extremely difficult situation for the many people and businesses impacted," they said.

The receivers' roles did not include trying to recover any of the much larger $106.2 million Mainzeal owed to trade suppliers, subcontractors and others, McCloy said. Recovery of that amount is the responsibility of liquidators Andrew Bethell and Brian Mayo-Smith.

Bethell said yesterday the chances of recovering the unsecured creditors' $106.2 million was uncertain, partly because of litigation being brought against other companies by the liquidators.

"That clearly will be disappointing to the subcontractors but all we're trying to do is maximise any recoveries and ensure that's as high as it can be," Bethell said.

Repairs of Hobson St's twin tower high-rise Hobson Gardens continued after materials were made available from King Facade, one of the many Mainzeal associates also in liquidation, he said.

"We controlled the facade materials and ended up selling those to the Hobson Gardens body corporate," Bethell said.

"It was a good outcome for the creditors of King Facade and Mainzeal and for the owners of Hobson Gardens. It has enabled the building to be completed and without that, I imagine that task would have been significantly more expensive and challenging."

McCloy said the money the receivers had clawed back had been raised from $4.6 million asset realisation and plant and equipment was sold by tender, auction or direct negotiation.

A further $7.9 million was raised by selling an Auckland commercial property and a number of Christchurch residential properties and Mainzeal was owed $9.3 million in contract receivables at the time of the receivership so McCloy and Bridgman collected on those debts.

In fact, the receivers got more than they needed. "We've passed some money across to the liquidators," McCloy said of raising $22.5 million when much less was needed for the BNZ, staff and IRD, although $3.8 million needed to be paid out of that in terms of expenses, security on 76 active sites which had to be secured at the time of the collapse and receivers' fees of $2.3 million.

McCloy said the BNZ had loaned money for Mainzeal to buy its head office at 200 Victoria St West in Auckland and that sale repaid the loan.

PwC's role will end soon. McCloy and Bridgman issued a six-monthly report on October 6 last year and another is due by April.

Mainzeal washup

PwC receivers' role:

Asset realisations $4.6m

Property sales $7.9m

Contract recoveries $9.3m

GST, interest and others

Total recovered for first-ranking and preferential creditors: $22.5 million

[Source: Colin McCloy, PwC]

BDO liquidators' role:

$106.2m owed to unsecured creditors

Outcome: uncertain "not likely to be substantial"

[Source: Andrew Bethell, BDO]

- Anne Gibson of the NZ Herald

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