Stonewood wash up still leaves about $20m of debt

The Chow brothers, whose company Inno, bought the assets of the collapsed Stonewood master franchise and continue to ...
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The Chow brothers, whose company Inno, bought the assets of the collapsed Stonewood master franchise and continue to operate the other franchises.

The list of creditors of the collapsed master franchise, Stonewood Homes NZ, includes more than 300 suppliers of services and products collectively still owed about $20 million. 

Stonewood Homes liquidator Rhys Cain of EY, who is investigating events leading up to the collapse, said unsecured creditors were owed about $15m, while secured creditor ASB was owed $4.2m of an original $8.6m debt.

About 110 home buyers were affected and their contracts were taken up by, Inno, a company owned by the Auckland-based Chow brothers, who continue to use the Stonewood brand for other unaffected franchises.

One of the Stonewood houses which won awards in the Registered Master Builder House of the year Awards 2017.
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One of the Stonewood houses which won awards in the Registered Master Builder House of the year Awards 2017.

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Cain said he had also just been appointed liquidator of Stonewood Blenheim, in addition to Stonewood Homes Limited and Stonewood Homes NZ.

"We're still doing our investigation. We're having a look at what caused the failure of the companies to make sure all the rules of the Companies Act were complied with. It will be a while before we've completed it," Cain said.

The investigation would peruse the role of directors who resigned in the weeks before the collapse and establish the priority of all creditors in case there was a possibility of any further recovery of money, he said.

But this seemed unlikely from the report of the receivers of the companies, Grant Graham and Neale Jackson of KordaMentha, who were appointed immediately after their collapse.

Their work was overlapping the liquidation but Graham said the receivership was likely to be completed soon.

The receivers have worked primarily for ASB which had the strongest claim via its general security agreement over the assets of the companies. 

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"It's unlikely there will be any funds available to unsecured creditors from the receivership," Graham said.

KordaMentha's fees have come to nearly $600,000 for managing the receivership, with legal fees taking $268,895, and other sundry fees taking total costs to $1.2m.

The amount that the Chow brothers' Inno paid to take over the assets of the failed Stonewood companies is not spelled out in the receivership reports, although one of them states asset sales of $5.6m.

Meanwhile, other unaffected Stonewood companies continue to operate in the main centres and have recently scored well in the Registered Master Builder House of the Year awards 2017.

Among the winners was Stonewood Homes (CHCH) Franchisee which is registered in the Companies Office as owned and directed by the Chow brothers, although it is described on the Stonewood web site as owned by Warwick Isaacs.

He was chief executive of the collapsed Stonewood companies and was subsequently reappointed by the Chows to run the Christchurch operation.   

Former chairman of the board of directors of the failed companies, Jim Boult, is still focused on housing and roading in his role as mayor of Queenstown where he has set up a task force to facilitate progress.

He works half the week as mayor with the rest of his time taken up as an executive director of Hawkins Construction, and other directorships.

 - Stuff

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