Gurpreet Grewal ran a 10-office Harcourts franchised business.
Gurpreet Grewal ran a 10-office Harcourts franchised business.
Unsecured creditors of a former high-flying 10-branch Auckland Harcourts network owned and run by Gurpreet Grewal will go unpaid.
Mike Lamacraft of Meltzer Mason has issued his second liquidation report on failed businesses Preet & Co Real Estate and Preet & Co Rentals, formerly of South and East Auckland.
Gurpreet,or Preet, Grewal was the sole director and shareholder of both businesses. Harcourts Group is suing him in the High Court at Auckland for $1.27 million, awaiting a reserved decision.
Harcourts Preet & Co was headquartered in Manukau with branches in Botany, Ellerslie, Manukau, Otahuhu, Howick, Manurewa, Meadowlands, Pakuranga and Papatoetoe.
Lamacraft said in a brief report that one unidentified secured creditor of the failed agency got money but unsecured creditors won't be paid.
"The sum of $10,000 was distributed to the secured creditor," Lamacraft said of Preet & Co Real Estate. "No other creditors have been paid and at this stage it is clear there will be no funds available to unsecured creditors."
The liquidator paid just over $1m between April and October this year, including $80,000 liquidator's fees, $76,000 in KiwiSaver employer contributions, $75,000 accounting fees and $35,000 PAYE tax.
The main recoveries came from property sales commissions. The ex-agency got $795,000 during those six months including $611,000 from commissions, $10,000 from asset sales and just over $100,000 in GST refunds.
Property management business Preet & Co Rentals will also be unable to pay unsecured creditors, Lamacraft said: "There will be no funds available to any other class of creditor."
One unnamed secured creditor got $17,000 in the six-month period.
Grewal once ran the fastest-growing Harcourts franchised business.
The first Meltzer Mason report on April 6 this year showed Preet & Co Real Estate had an estimated a $5.2m shortfall, including bank debt of more than $1m and $1.7m owed to Harcourts Group. Accounts for Preet & Co Rentals estimated a $1.6m shortfall partly from $1.2m owed in bank debt and more than $150,000 owed to Harcourts Group.
Preet, now in his mid-30s, was 33 years when he said he had "successfully turned his business into the fastest-growing Harcourts franchise in New Zealand".
On Friday, the Real Estate Agents Disciplinary Tribunal found two current Harcourts agents who previously worked at Preet & Co guilty of misconduct over a missing $1.2m.
Joseph Voordouw and Garry Mason are now awaiting a penalty decision. Charges were also laid against Grewal but those were stayed pending completion of other proceedings. The charge the tribunal was due to hear against Preet & Co Real Estate, which once traded as Harcourts Preet & Co, were withdrawn following the agency being put into liquidation.
