By Jenny Ruth
June 14 (BusinessDesk) - The first liquidators reports on Arrow International say the company’s main subsidiary has a notional $40 million available for unsecured creditors, not including $4.5 million in retentions held in trust.
That’s after $2.4 million owed to secured creditors, mostly for bonds.
But the liquidators, Andrew Bethell, Andrew McKay and Colin Gower of BDO, say that “as yet, we have not subjected the information to detailed verification procedures. Therefore we do not accept responsibility for its accuracy.”
Arrow’s directors and shareholders, Ron Anderson and Robert Foster, put the companies into administration on Feb. 28 and the “watershed meeting” of creditors on June 6 resolved to place Arrow in liquidation.
Another Arrow subsidiary, Construction, Labour and Resources was placed in administration on the same day and went into liquidation the same day as the main subsidiary.
The liquidators say the ultimate holding company had guaranteed construction performance bond facilities for the main subsidiary, Arrow International (NZ), as well as its performance under “particular individual construction and services contracts,” so the parent company was also placed in administration and then in liquidation.
That was “as a protective measure against calls under these guarantees and to allow an orderly realisation of its assets in the event a call arose.”
Two other companies owned by the parent company, Arrow International (Pacific) and Arrow International (Australia), remain registered with the Companies Office but aren’t in liquidation or administration.
The report on the main subsidiary confirms that a $4.5 million adjudication against the company that it couldn’t meet was one of the factors that led to the administration.
Anderson confirmed in February that Arrow had a dispute being adjudicated by the Building Disputes Tribunal. The other party was subcontractor March Construction, a Christchurch-based company now owned by France-based Vinci Construction which related to work on student accommodation towers in Anzac Ave in Auckland.
The report shows the only one of the subsidiary’s assets the liquidators are sure of at this stage is $4.38 million in the company’s bank accounts – the parent company’s accounts show $146,000 in that company’s bank accounts while the other subsidiary’s accounts show $39,000 in cash – that secondary subsidiary has negligible other assets apart from $43,000 in related party debts.
The other main assets of the main subsidiary are $15.7 million in accounts receivable, $13.2 million of investments in subsidiaries, $2.6 million in property, plant and equipment and $7.87 million in related party debts.
The bulk of the parent company’s notional assets are $26.1 million of investments in subsidiaries and $15.7 million of related party debts.
The reports list well over 900 creditors, primarily of the main subsidiary. Creditors of the parent company include the main subsidiary, ANZ Bank and Vero/AAI Bonds.
The main subsidiary owes $1.37 million to preferential creditors, including $944,000 owed to employees and $58,000 owed to IRD but only has $742,000 of known available funds.
“It is too early to reliably estimate what funds, if any, will be available for unsecured creditors,” the reports say.
Creditors have until July 12 to advise the liquidators of any claims against the three companies.