The trading business of New Zealand's biggest furniture and homeware store owes $22.3 million in debts to staff and Inland Revenue but unsecured creditors will not get a cent.
Accounts in the first receiver's report of the Henderson-based Magsons Hardware, trading as Nido, shows the extent of liabilities and how the business cannot pay those without security any of the $22.3m.
Liabilities are listed at $15.7m debts, $4.6m accounts payable, $666,000 employee provisions, $502,000 Inland Revenue deferral and $778,000 in "other liabilities".
Kare Johnstone and Conor McElhinney of McGrathNicol said they were doing their very best to try to sell the failed business by continuing to operate it to generate money.
But unsecured creditors can whistle for what they're owed.
"The receivership will not return sufficient funds to repay the appointer in full and accordingly there will not be funds available for unsecured creditors," the report said.
"The receivers are currently working, in conjunction with CAIL, to conclude a sale of the business and assets of Nido to a third party. Due to the sensitive nature of the transaction and ongoing negotiations, the details of the proposed sale have been omitted from this report," they wrote.
They spelt out just what went wrong with the dream of Vinod Kumar, ex-owner of a string of Mitre 10 stores, who claimed to have pioneered the MEGA Mitre 10 concept, although that national chain disputes that and said it was management - not Kumar - who launched the successful MEGA-stores concept.
The receivers also described how Nido failed.
"New Zealand's largest furniture and homeware store commenced trading on May 29 2020, approximately nine months later than the planned opening of September 2019. The company was unable to commence trading as planned as a result of continued delays in construction of the retail premises - a new 27,000sq m purpose-built building," they wrote.
The receivership followed the contractor completing the building going into liquidation, trading challenges and with lack of funds to cover losses and ongoing trading costs, they said.
"Prior to the appointment of receivers, the company had entered into a debt repayment plan with Inland Revenue with respect to GST and PAYE outstanding totalling over $600,000.
"The appointment of receivers followed the triggering of events of default under the term loan agreement and/or security documents, including but not limited to unpaid interest," they said.
A search of the Personal Property Securities Register showed 29 parties had registered a financing statement against the company.
They include Mitre 10 (New Zealand), Crown Equipment, Bridgestone New Zealand, UDC Finance, Fiji Xerox Finance, Canon New Zealand, Odin Investment, Pacific Wallcoverings, Forklift Rental & Leasing, Canon New Zealand, Vijay Trustees and Magsons Hardware.
IRD, employees with unpaid wages and entitlements and Customs are preferential creditors, the report said.