Ongoing court cases stall liquidation
The liquidators of collapsed construction firm Mainzeal Property say attempts to stop the liquidation of a related company have diverted valuable time and resources.
In a creditor update, BDO said its liquidation of Mainzeal Property and 12 other related companies was progressing without an end date in sight.
However, ongoing court cases over the liquidation of Richina Global Real Estate (RGREL) had "caused delays and increased the costs of the liquidation".
RGREL is Mainzeal Property's former parent company and is believed to have owed Mainzeal Property about $15m before the construction company's shares was transferred to another firm, Mainzeal Group, six weeks before it failed.
The courts approved BDO's liquidation of RGREL last month but Mainzeal and RGREL's sole remaining director Richard Yan is appealing the move.
He also applied unsuccessfully to the High Court and then the Court of Appeal for a stay of liquidation proceedings until the matter had been decided.
BDO confirmed that unsecured creditors were still owed at least $139.3 million from all the Mainzeal companies in its care, but it believed there were a number of creditors who had yet to make a proper claim.
There were initially 42 active and 76 completed construction contracts, which had reduced to 38 active and 60 finished contracts.
Liquidator Andrew Bethell said resolving the outstanding contract receivables was proving a "complex exercise" and the recovery would be significantly lower than their book value.
"However, we will be pursuing all recovery options available to us where we consider debts to be due and payable."
Employees of Mainzeal Property had received all they were owed, about $5.3m, and employees of related company, King Facade, were given a 70 per cent distribution
Any further payouts to King Facade staff or unsecured creditors depended on the outcome of negotiations with a Chinese company Richina Pacific (China) Investment, and the court cases over RGREL and Yan-owned company Isola Vineyards (IVL).
The High Court had declined to appoint liquidators to IVL, a decision BDO was appealing. Yan and his wife, Tina Wang are the only directors of IVL.
PWC, the receivers of Mainzeal Property, Mainzeal Living and 200 Vic, is due to report on or about April 5.
- Fairfax Media