With unsecured creditors of Auckland’s failed Ormiston Rise development currently claiming $20.9 million, liquidator Damian Grant questions why receivers from Calibre Partners haven’t closed their files and quit. US funders claiming as secured creditors have been paid in full and the receivers’ job is over, Grant claims.
Plans for Ormiston Rise were broadcast in a blaze of publicity with nearly 800 new homes promised, primarily for first home buyers. Funding was provided by US financiers: Arena Alceon NZ Credit Partners LLC. What was intended to be a four-stage project started in early 2020. Some fifteen months later, Arena pulled its finance with only stage one civil engineering works nearly complete and stage one houses under construction. Receivers from Calibre Partners took control on behalf of Arena. They sold off the balance of the land in 2021 to a company related to Arena: The Neighbourhood South Ltd. Mr Grant claims the $198,000 sale price cleared all of Ormiston’s secured mortgage debt. The receivers’ job is over, he says. Remaining company assets including all cash should be handed over to him as liquidator for the benefit of unsecured creditors, he says. Calibre Partners refuse; the level of unpaid secured debt is not finalised, it says.
The High Court was told legal action is under way to determine how much Arena can claim under its mortgage. The liquidator claims $18 million claimed by Arena as a ‘final interest payment’ is in reality a ‘success fee’ payable only on successful completion of the development. The liquidator questions whether ‘preservation costs’ incurred by Calibre Partners are also covered by Arena’s mortgage. Evidence was given that Arena agreed to stump up an extra $30 million so Calibre Partners could complete partly finished homes at Ormiston and get money from purchasers buying off the plan.
Whether either of these amounts is recoverable by Arena as part of its secured debt is yet to be decided. In the interim, both Arena and Calibre Partners were ordered to make available to the liquidator all details of the receivers’ construction budget, plus copies of the project’s monthly progress certification and quantity surveyor reports.
Jackson v. Grant – High Court (24.08.22)
22.151