Companies associated with Du Val Group placed into statutory management

Companies associated with Du Val Group, a developer of large-scale residential property projects in Auckland, have been placed into statutory management by the Government under the Corporations Act.

The group, founded by developers Kenyon and Charlotte Clarke, was placed into receivership earlier this month by the Financial Markets Authority.

In a statement on the Government's action, the Financial Markets Authority said the Corporations Act provides remedies to deal with "complex corporate failures", and is most appropriate where a company has, or may have been operating "fraudulently or recklessly".

Alternatively, the Act is also used where the ordinary law is "inadequate to deal with an orderly wind up of the companies".

"In this case, the FMA considers both provisions apply," the FMA said.

Commerce and Consumer Affairs Minister Andrew Bayly said the group has left "significant liabilities".

"The situation is complex and such a scale that immediate intervention is required to prevent broader harm.

"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 added 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 of 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, said Bayly.

"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.

The Government has appointed John Fisk, Stephen White and Lara Bennett of Price Waterhouse Cooper New Zealand as statutory managers. This follows their recent appointment by the High Court as interim receivers for the Du Val Group.

On the appointment, Fisk said: "We are 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."

Last week, 1News reported both tradies and cleaners are facing an uncertain future after the company was put into receivership, and the Blues rugby team was also reportedly among those owed money.

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