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.
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.
Read more: Real estate agents guilty of misconduct
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.