Du Val Group entities placed in statutory management to ‘prevent broader harm’
Wednesday, 21 August 2024
The Government has placed companies associated with Du Val Group, a developer of large-scale residential property projects in Auckland, into statutory management, Commerce and Consumer Affairs Minister Andrew Bayly says.
“Du Val Group has recently gone into interim receivership, leaving significant liabilities. The situation is complex and of such a scale that immediate intervention is required to prevent broader harm,” Bayly said in a statement.
“Statutory management is the option of last resort used to deal with complex corporate failure where ordinary insolvency law is inadequate. It is intended to protect investors and creditors from further losses, and to enable the orderly administration of a company's affairs,” Bayly said.
“Du Val Group is made up of about 70 entities, including 46 subsidiaries, and 20 special purpose vehicle limited partnerships. There are between 120–150 investors, home buyers and commercial lenders tangled up and given the number people involved it’s important we ensure the process is orderly and fair.
“By placing Du Val into statutory management, all current insolvency processes are suspended, enabling the affairs to be dealt with by one team of people, rather than multiple insolvency processes unfolding simultaneously.
“The decision to put the companies into statutory management follows a recommendation by the Financial Markets Authority (FMA).”
The FMA made its recommendation based on its ongoing investigations and following a report from the Court-appointed interim receivers.
“Following Cabinet’s approval, the Governor-General has made an Order in Council. This decision is effective from today.”
The order applies to four core Du Val Corporations and 20 associated persons (all limited partnerships), along with 46 subsidiaries. One subsidiary is excluded as it is 50% owned by a third party and operates independently of the Du Val Group, Bayly said.
The Government has appointed John Fisk, Stephen White and Lara Bennett of Price Waterhouse Cooper (PwC) New Zealand as statutory managers. This follows their recent appointment by the High Court as interim receivers for the Du Val Group.
Fisk said in a statement the receivers were “keen to ensure construction works continue on the active construction projects Du Val has and that it is business as usual for the rental properties”.
“Our initial focus will be to preserve and realise best value for all stakeholders. We will be communicating with all creditors and investors, and will be conducting a thorough investigation. We will provide creditors and investors with regular updates on the progress of the statutory management.”
The FMA had considered that the conditions under the Corporations Act for statutory management had been met, a statement from the regulator said.
The statement said statutory management was the most appropriate available option for each of the Du Val group corporations to which it has been applied, in order to:
limit or prevent the risk of further deterioration of the financial affairs of those corporations
limit or prevent the carrying out, or the effects of, any fraudulent act or activity
preserve the interests of their creditors or beneficiaries or the public interest
enable the affairs of the Du Val group corporations to be managed in a more orderly way