Blue Chip creditors owed 'much more'

The liquidator of companies entangled in the Blue Chip property investment failure says the amount owed to creditors is $84.3 million - much more than originally estimated.

Liabilities in the ledger of Blue Chip New Zealand, which formed a centralised treasury function within the group before the business was sold to a New Zealand franchise in August, include $65 million worth of inter-company loans.

Liquidator Meltzer Mason Heath says no Blue Chip New Zealand assets are likely to be recovered. "We've taken an assumption that the [company's] assets are probably not worth anything at this stage. We may be wrong," said liquidator Arron Heath.

"If we succeed in realising some of those inter-company advances then obviously some of that money will flow back.

"That $84 million represents the worst outcome if you take all the possible liabilities and assume that there are no assets recovered.

"Some of those guarantees may fall away as the people recover [monies] out of the other companies they had claims against."

It was previously estimated the amount owed to more than 3000 investors was about $70 million.

Many paid out hefty deposits on developments that have not progressed from the plans, others hold sale and purchase agreements on apartments they simply cannot afford.

Some of the other 20 companies entered into liquidation held inter-company accounts with Blue Chip New Zealand, though some of the $84 million was represented by companies not in liquidation, Mr Heath said.

As well as inter-company loans, conservative estimates of Blue Chip New Zealand's ledger list $9.5 million in rent guarantees and $5.4 million in extra guarantees.

More funding is being sought to extend investigations.

Most of the 1600-plus Blue Chip New Zealand investors are also creditors of ART Apartments, Auckland Residential Tenancies or Bribanc Property Group, entered into liquidation in February.

Blue Chip New Zealand acted as the trading entity for the New Zealand Blue Chip operation up to August 2007 when its role was reorganised with a Master Franchise granted to Diem.

This effectively transferred the business undertaken by Blue Chip New Zealand and some of its subsidiaries to the franchisee and its trading entity Mide, also in liquidation.

- © Fairfax NZ News