Two Queenstown lodges placed into receivership in February have sold, but they and their sole shareholding company have now been placed in liquidation.
Evergreen Lodge, at Sunshine Bay, and Remarkables Mountain Lodge, on Kingston Rd, were sold by tender for a total of $3.87 million.
However, the second receiver’s report says both property companies and their shareholding company Sleep Overs Limited were placed into liquidation on September 15.
The sole director of all three companies is Elliot Sgargetta, of Australia.
The receiver’s report, prepared by Andrew Hawkes and Vivian Fatupaito, of KPMG, said it was decided to continue operating both lodges, given demand for accommodation in the area and to assist with obtaining the best sales price.
Twelve tenders were received for Remarkables Mountain Lodge, from $550,000 to $1.9 million, and eight for Evergreen Lodge, from $950,000 to $2 million.
One tender was received for both properties for $2.5 million.
"There were conditions attached to the top tenders for each property and the receivers negotiated to obtain ‘clean’ tenders for each property.
"The total funds received from the property sales was $3.87 million.
"Previous valuations obtained by ASB Bank ... valued [both] at a combined amount of $3.36million under forced sales conditions."
Both sales included chattels. ASB Bank had, to August 4, been paid $3,340,861.98c in respect of money owed by Sleep Overs Ltd, with a $10,000 payment made to Diamond Red Limited in settlement of its security over chattels to ensure the property sales could proceed.
The only preferential creditor for the shareholding company was Inland Revenue, but because no tax or GST returns were completed by the company, the amount of that claim had not yet been quantified.
That company’s GST status was the main outstanding matter for the receivers, their report said.
Sleep Overs Ltd was not GST-registered because the director had "previously instructed an adviser to cease the company’s registration".
"Therefore, the sale of the two lodges was done on the basis of a non-registered seller.
"The Inland Revenue Department are currently challenging this treatment and at this date the matter is not resolved."
However, if the company was deemed to be registered, that would have "no impact" on proceeds received by the company for the property sales, as the purchasers were both registered for GST so the transactions would be zero-rated.
The IRD was also the only preferential creditor for the lodge companies, but the amount owed was yet to be fully quantified because no tax returns had been completed.
In respect of Evergreen Lodge Ltd, the initial amount owed based on GST arrears was $15,619, while Remarkables Lodge Ltd owed $14,121, based on GST arrears.
Remarkables Lodge Ltd owed $25,965 to unsecured creditors, and Evergreen Lodge Ltd owed $12,674.
Unsecured creditors’ claims for Sleep Overs totalled $81,713; insufficient funds meant unsecured creditors would not receive a dividend from the receivers.
Short-stay accommodation operator Auckland Stays had also been issued with "PLA notices", the report said.
Receivers were advised by a third party it had been operating as a division of the shareholding company, but the director and chief financial officer failed to provide sufficient information to receivers regarding the operation, "in particular where the trading proceeds were being deposited".
"Without this information there was no economic advantage for the receivers to adopt the contracts associated with Auckland Stays, so the property owners issued PLA notices to the company, effectively terminating the operation," the report said.
On "numerous occasions" the receivers requested information from the director and CFO regarding websites for the company and its two related entities but none was provided.
"No assistance to facilitate the sale or transfer of the websites to the lodge purchasers has been provided by the director.
"Since the property sales we have repeatedly requested that the websites be taken down, but the director and website operator have not co-operated.
"The receivership process has continued to be frustrated and delayed by the director and company officers being unco-operative, the lack of any director or shareholder minutes, inadequate record keeping and the lack of any formal financial statements and management accounts since the company began trading.
"It would appear the director has been in breach of the Companies Act 1993 with regards to maintaining adequate books and records," the report said.
Sleep Overs Ltd was incorporated on October 26, 2012.
The lodge companies were incorporated the following year — Evergreen on February 13, 2013 and Remarkables on August 14, 2013.
Lodges in receivership
• Evergreen Lodge was a five-bedroom, five-bathroom lodge on 490sq m, next to reserve land at Sunshine Bay.
• Remarkables Mountain Lodge offered seven guest bedrooms, an outdoor courtyard with swimming pool, sauna and spa, tennis courts and a helipad. The 490sq m property is on a 8188sq m section. Rateable value in April $1,550,000.
