The failed Bella Vista Homes development site at The Lakes. Photo / File
The failed Bella Vista Homes development site at The Lakes. Photo / File
The liquidators of Bella Vista Homes have just $28 with which to pay more than $4 million to creditors – unless they can recover money from two former directors and a series of related company transactions.
Insolvency practitioners Rhys Cain and Rees Logan released their first report on Wednesday andoutlined their plans to recover the millions owed.
They have issued a letter of demand to former Bella Vista director and shareholder Danny Cancian, seeking to recover funds from his overdrawn shareholder current account.
Cancian owes "a significant amount" to Bella Vista Homes, Cain told the Bay of Plenty Times. He would not disclose how much that was.
The liquidators have also put former director and shareholder Daniel De Martin on notice of a legal claim and are pursuing the matter with the assistance of a legal counsel.
The claim and recovery action is in relation to De Martin's $1.5 million buyout – and the transactions surrounding it – which liquidators previously said severely harmed the operations of Bella Vista.
De Martin's settlement was a year and three months before the company went into voluntary liquidation on November 30, 2017.
The liquidators want to recover that buyout, which included a $1.3 million lump sum.
The liquidators are also pursuing funds from companies connected to Cancian in relation to a series of transactions that were made by Bella Vista shortly before liquidation.
The transactions had the effect of reducing the amounts owed by the related companies – of which Cancian was also a director and/or shareholder – at a time Bella Vista was insolvent, the new liquidators' report said.
The liquidators are awaiting legal advice before determining their next steps regarding those related company transactions.
Cain and Logan were appointed joint liquidators of Bella Vista Homes on January 18 after the resignation of former liquidators Thomas Rodewald and Kim Thompson.
Rodewald and Thompson resigned after two creditors asked for them to be replaced.
"Given the quantum of total company debt these two creditors held, the former liquidators considered it appropriate to resign and appointed the liquidators in their place," the report said.
The current liquidators hold $28.03 to go towards repaying creditor claims.
• Cancian's buyout of former director/shareholder Daniel De Martin, which "appears to have resulted in cash and assets being transferred out of the company" to Cancian and then used to pay for the acquisition of shareholding.
Former Bella Vista Homes director Danny Cancian. Photo / File
Before completing the liquidation, Cain and Logan will continue their investigations into the books, records and affairs of Bella Vista Homes.
If any further recovery actions are identified, they will take the appropriate actions "where it has potential to increase the recovery available to creditors".
The liquidators' investigation into Cancian and De Martin's compliance with their duties and obligations under the Companies Act was ongoing, the report said.
"As the liquidators do not have any funding available, we have met major creditors to discuss options regarding funding to pursue the recovery actions identified."
In the past, Cancian has blamed the failure of the company on delays caused by the Tauranga City Council, along with a lack of profitability and him buying out his business partner.
The liquidators said in preparing the report, they relied upon and did not independently verify or audit information or explanations provided to them.
Creditor claims
To date, liquidators have received the following claims: IRD: $679,877 Unsecured Creditors: $3,456,832 Total: $4,136,709
Realisations and distributions for the reporting period (November 30, 2017 to May 31, 2018)
Realisations Cash on hand at liquidation: $34,415.44 Sale of vehicle: $1304.35 TCC-refunded inspection fees: $960.96 Funds held in trust by lawyers: $724.91 GST on income: $339.79 Total realisations: $37,745.45
Distributions Former liquidators' fees: $21,884.20 Forensic accounting fees: $7250 GST on expenses: $4919.50 Former liquidators' disbursements: $2952.64 Legal fees: $709.80 Bank fees: $1.28 Total distributions: $37,717.42
