Auckland supermarket Food4Less New Lynn allegedly owes $2.9m to more than 90 creditors

Food4Less New Lynn is in liquidation, owing creditors around $2.9 million. Photo / Google Maps

Auckland supermarket Food4Less New Lynn allegedly owes more than 90 creditors around $2.9 million, according to a liquidator’s report.

Food4Less New Lynn was placed into liquidation in February by the High Court after petitioning from one of its creditors.

The supermarket is part of a chain of ethnic food stores in Auckland and Hamilton, the remaining of which are unaffected by the liquidation.

Liquidator Pritesh Patel of insolvency firm Patel & Co said he explored two options for the business – a “best-case scenario” of quickly selling the business to maintain goodwill and a “worst-case scenario” of closing the business down and trying to sell stock and assets.

“Given that no lease would be available to any new buyer of the business, there was no option but to embark on the worst-case scenario,” the report said.

Patel said the whole sell-down process took 11 days from the date of the liquidation.

A statement of affairs shows secured creditors are owed more than $1m, including around $550,000 to the Bank of New Zealand.

Inland Revenue is owed around $425,000 in preferential claims and a further $434,000 in unsecured claims.

Unsecured trade creditors are owed around $959,000.

Patel said around $195,000 had been realised through the sale of stock and plant and equipment.

This allowed for all employees to be paid their final wages prior to liquidation ($7,577.50) and for post-liquidation work performed.

Food4Less New Lynn went into liquidation in February. Photo / Google Maps

Companies Office records show Romit Prakash is the sole director of the company, which is owned by U & S Chand Investments Limited – which Romit and Amit Prakash each own a 50% shareholding of.

Food4Less also has supermarkets in Manurewa, Ōtāhuhu and Hamilton.

Romit Prakash said the closing of Food4Less New Lynn was “emotional, overwhelming and deeply humbling”.

“Recently, we received the difficult news regarding the liquidation process. Hearing those words was one of the most confronting moments of my professional life,” Prakash said in a Facebook post.

“Like many businesses, we have faced challenging circumstances over time – pressures that built quietly, decisions that carried weight, and realities that eventually could not be ignored.

“Despite every effort, every long day, every late night and every attempt to find a path forward, we have reached a point where closing is the responsible step.”