More than 120 creditors have lodged claims following the liquidation of livestock (kararehe pāmu) export company Genetic Development (NZ) Exports Limited Partnership.
In the first report to creditors, PwC liquidator Malcolm Hollis said the GDEx creditor list is made up of farmers in the main, with livestock agents, trucking companies and ports also in the pool.
Most creditors are in the $20,000-$50,000 bracket, but there are some significantly larger ones.
It is understood creditors are collectively owed millions, with about $2.7 million alone owed to two trucking companies. Hollis could not provide an overall tally of the creditor claims.
“At this time we are still receiving creditors’ claims in the liquidation. Updated figures will be provided in our next statutory report,” he said.
At this stage all creditors rank equal as unsecured creditors.
GDEx was put into liquidation by the high Court in Hamilton on September 5, 2022, with directors blaming the company’s financial challenges on a failed shipment of cattle to China.
The livestock ship MV Al Kuwait never came to New Zealand in early May to collect 12,000 head of cattle that were waiting on two pre-export isolation farms.
Total direct costs and losses for the failed shipment added up to more than $5m.
Hollis said the potential of a litigation claim on the charter of the ship that never arrived is one of three key focuses of the liquidation investigation.
“We are in communication with relevant parties and this is a main aspect we are working on.”
The second focus is on whether the GDEx limited partnership traded insolvent.
Equalisation between creditors – whether creditors were treated equally prior to liquidation – is also under investigation.
“We have got the powers to go through and determine any element of unfairness with some [creditors] paid in full and others not paid at all,” Hollis said.
“We need evidence of people’s knowledge, if some are aware they were getting paid in full and others not at all then it can be voidable.
“From what we are hearing, many did know the payment process … knowing how the process was happening indicates it is not fair and equal.”
GDNZ Management Ltd was incorporated on October 9, 2020, with the ultimate holding company being China-based HASLIC Limited, which had listed as a private company on July 7, 2020.
HASLIC holds 60% of the shareholding and GDNZ 40%.
The five listed directors include Hamilton-based David Hayman and David McEwen, alongside three China-based directors, Jin Ding, Sicong Wang and Kangyun Yang.
Hollis said it is an “unusual” situation with the entity in liquidation a partnership, as part of a general partnership.
The NZ livestock exporting arm of the limited partnership is the entity in liquidation.
Meanwhile Hayman is back in the live export business with another company, Herdbuilder.
Hollis said while it is frustrating for creditors, liquidation does not stop a director running other businesses.
Implementing the restructuring of a company into a phoenix company that rises from the ashes of an old, failed company is just as much a legal exercise as it is an accounting and public relations one.
“Phoenix company” refers to a failed company that at any time before, or within five years after, the commencement of the liquidation is known by the same or a similar name.
A new company with a new name is formed and largely the old company is transferred into the new one with selected staff, assets and business, though the old company’s debts are not.
“Understandably if a director does this it can be a source of contention for creditors of the failed company and they naturally get frustrated.
“But unless they are contravening the Companies Act under the phoenix companies rules, we can’t stop them.
“We will look at that though – but at this stage I don’t believe they are [contravening the rules],” Hollis said.
Herdbuilder Export Services Limited lists its two directors as David Hayman and David McEwen under the ultimate holding company Hayman GD Consulting Ltd, of which Hayman is the sole director.
