Creditors have called in more than $18 million in debt owed by the developer of the Pacific Apartments in Mount Maunganui, forcing the company into receivership and liquidation.
The receivers are selling Asia Pacific Management's 18 remaining apartments by public tender in an effort to recover $12.5 million owed to the Westpac Bank, and will hand the business over to the liquidator when they are done.
Appointed by the court in mid-February, the liquidator will distribute whatever remains of Asia Pacific's assets to other creditors before closing the company down.
Completed in 2009, the $60 million Pacific Apartments were developed by Asia Pacific's sole director and majority shareholder, Philip Lindsey.
The diamond-shaped building contains 68 apartments, ranging from one bedroom studios to the four bedroom, four bathroom and three living room penthouse on the 11th floor.
Mr Lindsey was able to sell 50 of the apartments before Westpac called his debt in.
Tenders on the unsold 18 apartments closed yesterday. However, it seemed unlikely unsecured creditors would see any of their money due to the extent of Westpac's secured claim, the receivers said. In addition to Westpac's secured claim of $12.5 million, Asia Pacific owes $1 million to an investor consortium named CP(Pacific) Ltd, $1.4 million to the Inland Revenue Department, and about $3.8 million to various unsecured creditors.
A receivers' report filed in January says the launch of the Pacific Apartments' sales programme coincided with the global financial crisis, resulting in "funding shortages for purchasers and a sudden glut of high-end apartments on the Mount Maunganui market".
Apartments at the complex were sold at discounted prices in an effort to drive sales. However, this led to the company not being able to pay its finance costs, the report says.
"By late 2012, however, the company's financial position had deteriorated to such a level that Westpac was obliged to place the company into receivership."
In addition to the 18 units at the Pacific Apartments complex, Asia Pacific owns two residential properties - one in Mount Maunganui and the other in Papamoa - which are subject to Westpac's claim.
Mr Lindsey and his wife, Tania, moved to Tauranga from Auckland in 2009. Mr Lindsey's parents, Grahame and Carol Lindsey, also moved to Tauranga to manage the Pacific Apartments and the Number 8 cafe.
The sale of the apartments was being handled by Peter Clarke of Bayleys Realty.
Ross Stanway, chief executive of Realty Services - which owns Bayleys and Eves - said expressions of interest in the apartments had been significant, with more than 200 property packs sent out to prospective buyers.
Receiver Andrew McKay of Corporate Finance said it was too early to say how many of the apartments had sold, as tenders closed only last night.
