Du Val leaves at least quarter-billion in debts, Govt steps in

High-profile developer Du Val owes at least $250 million, initial investigations have revealed, as the Government takes the rare move of appointing a statutory manager due to the size and scale of the business' collapse.

The Financial Markets Authority (FMA) requested the appointment, announced last night, citing the complexity of the situation, with an active investigation ongoing.

PwC, the accounting giant now in full control, told 1News that the collapse of Du Val was the most complex case it has ever encountered.

A receivership report submitted to the High Court hasn't yet been made public.

The Du Val Group empire, founded by high-flying socialites Kenyon and Charlotte Clark, encompassed core construction companies and dozens of other entities, creating a tangled web for liquidators to unravel.

Additionally, the list of those owed money is extensive, including lenders, contractors, and potential homeowners, with 120 investors also caught in the fallout.

FMA general counsel Liam Mason said appointing a statutory manager was rare.

"This is very rare. It's a significant step for the Government to appoint a statutory manager. It really is an option of last resort."

Speaking to 1News, subcontractors criticised Du Val's financial management, saying that the company's practices were "really bad" and that it should've been liquidated earlier.

However, there is some positive news for some amidst the turmoil. PwC has arranged for work to restart at two developments, with contractors now receiving payment.

Du Val Capital Partners Limited and several entities within the Du Val Group were first placed into interim receivership on August 2.

Commerce Minister Andrew Bayly announced last night the Government had moved to place companies associated with the Du Val Group into statutory management.

Cabinet signed off the recommendation, which had to be referred to the Governor-General to make an Order in Council.

The Government's rarely-exercised powers were last used 14 years ago, during the high-profile collapse of Allan Hubbard's South Canterbury Finance.

A spokesperson for the FMA said yesterday: "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 or, alternatively, 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."

Bayly said the move was in the interests of protecting investors and creditors.

"This means that the statutory manager can take total control of the group and manage any developments, or any realisation of assets in a much more orderly way.

"Rather than being in a situation of fending off other liquidators involved in the process and trying to seek to protect the interests of their respective security holders."

He added: "This is about speeding everything up. This is about giving one party. In this case, a statutory manager — the overriding ability to move quickly.

"We as a Government have moved really quickly. I was recommended this on Sunday, over the weekend, and we've moved really quickly to put this in place.

"Ultimately we want to protect the interests of investors and creditors."

Are you impacted? Email: katie.bradford@tvnz.co.nz

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