Hopes fade for Hartner cash

By ANNE GIBSON property editor

Unsecured creditors owed more than $20 million by the Hartner Group are unlikely to see any of their money again, the receiver has revealed.

In his first detailed report on the collapse, PricewaterhouseCoopers receiver John Waller says he is unable to promise anything to those owed money. Even the first debenture holder, National Bank, is unlikely to be paid in full.

National Bank is owed $8.5 million, taking Hartner's debts to nearly $30 million.

However, Auckland building industry disputes arbitrator Geoff Bayley believes the total could go as high as $50 million as more debts are identified.

The report reveals that Onehunga builder Wayne Hartner and wife Gaile have a string of investments in the forestry, thoroughbred, childcare and marine sectors.

Many of the assets are owned by family trusts and are therefore out of the receiver's reach.

If Mr Hartner was made bankrupt, however, creditors with personal guarantees over assets could try to recover money if it could be shown the assets were placed in trust within two years of the bankruptcy.

In his report, Mr Waller says his initial analysis shows the National Bank is unlikely to be paid in full, "with the flow-on effect of this being that it is unlikely there will be any funds available for distribution to unsecured creditors."

The report says Hartner Construction had assets of $20.1 million and liabilities of $28.7 million, creating a shortfall of $8.6 million.

It also reveals assets owned by Mr and Mrs Hartner include forestry investments at Waingaro Springs near Ngaruawahia; the Aintree and Sandy Lane daycare centres; an interest in the Twin Pines Thoroughbred partnership; and R&R Charters, which rented out Mr Hartner's luxury launch, Risk & Reward.

The report provides no estimate of the value of these assets, but notes that many are held in "complex" family trusts.

Both Hartner Construction and Hartner Group were placed in receivership on February 1. Hartner Construction, New Zealand's fourth-largest builder, was subsequently placed in liquidation at the request of creditors claiming $1.5 million.

The Mirror Trusts own land and buildings at 105-107 Neilson St in Onehunga; the Hartners' new house in Golf Rd, Epsom; forestry; horses and Songbird Holdings, which owns a proposed office development called Apex House.

The Hartner Family Trust owns R&R Charters; Lifestyle Interiors in Newmarket; The Reef apartments in Mt Maunganui; Viaduct Carpark, which developed a parking building in the central city; and Hartner Group.

Hartner Group's assets are 50 per cent of Vonelle Holdings, which owns Excell Corporation; Hartner Construction; and various single-purpose companies.

The report also notes a number of other entities, most of which are no longer trading or have no assets.

Hartner Construction had building jobs at Princes Wharf, Westward Park apartments in Kelston, the Birthcare Centre in Auckland, 55 Anzac Ave, 74 Shortland St and two Wellington contracts - one for the Youth Hostel Association, the other for Harbour City Funeral Home.

Mr Waller says the next step is further asset sales.

Industry representatives and creditors said yesterday that the report confirmed what they already knew - that there would be no payout.

"I haven't even seen the report," said Dave Mackinnon of Brace Construction, owed about $200,000. "Unless the Government gets involved, we won't get anything."

The executive director of the Building Subcontractors Federation, Peter Degerholm, repeated his call for the Government to appoint a statutory manager.

"The number of family trusts involved here is exactly why I believe a statutory manager may be the only party that could help."

Both Mr Degerholm and Mr Bayley have been pushing for a statutory manager - with much wider powers than either a receiver or a liquidator - to be appointed.

Mr Bayley said the report revealed a "terrible outcome for unsecured creditors."

"It's taken the receiver two months to come up with a report with only half the creditors' claims."