Failed Du Val businesses owe $237.6 million: first PwC statutory managers’ report

Businesses in the failed Auckland-headquartered townhouse/apartment developer Du Val group owe an estimated $237.6 million, according to a new report by the Cabinet-appointed statutory managers PwC.

In a summary of estimated external obligations by the businesses headed by Charlotte and Kenyon Clarke as at August 31, PwC today detailed:

• First-ranking secured creditors owed $170.7m;
• Investors owed $41.2m;
• Unsecured creditors owed $18m;
• Preferential creditors owed $7.5m, including employees and Inland Revenue.

That takes total estimated external obligations to $236,607,000, according to the summary.

But PwC also warned of unreliable records and accounts, citing “a number of limitations in respect of these financial records”.

PwC’s John Fisk, Stephen White and Lara Benett issued the report.

Kenyon and Charlotte Clarke, of Du Val Group, which is in statutory management.

In August, the Herald reported how 64 entities were caught up in the failure.

Many – but not all – have Du Val in their name. Some previously had Du Val but that was changed just before the receivership and management.

Today, PwC issued an estimated statement of affairs for each of the Du Val businesses it controls.

PwC partner and receiver John Fisk.

When it was appointed, it gave notice to parties with a registered security interest. It issued requests for information to the group’s advisers and sought all records and books for financial information.

It gave notice to all banks and other third parties and advertised its appointment.

It talked to secured lenders, briefed staff, arranged insurance and got security on building sites to ensure trading could be continued.

Du Val had many activities including property development, development funding, selling property, taking funds to invest, portfolio management and facilities management for larger developments or landlords.

Kenyon and Charlotte Clarke, of Du Val Group, which is in statutory management.

On August 21, Cabinet moved on Du Val Group, taking the rare step of placing it in statutory management.

The move follows the group of companies being placed in interim receivership on August 2 after an application by the Financial Markets Authority (FMA) and police entering the Remuera home of the Clarkes.

Asset preservation orders were issued and interim receivership orders were also made directly against the Clarkes.

Commerce and Consumer Affairs Minister Andrew Bayly said Du Val Group had recently gone into interim receivership, leaving significant liabilities.

“The situation is complex and of such a scale that immediate intervention is required to prevent broader harm,” Bayly said last month.

Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.