Insolvency authorities have given up chasing a company owned by Lindsay Singleton, developer of a swanky Queenstown hotel.
The Official Assignee is liquidating Singleton’s SMG Properties, which developed The Rees hotel on Queenstown’s Frankton Road before going phut last year owing $53 million.
“Creditor funding has not been forthcoming [and] no further action will be taken,” an Official Assignee spokesperson says.
In September, the Official Assignee’s Keaton Pronk wrote to almost 60 unsecured creditors owed $1.7m – including at least 20 from Queenstown.
Pronk asked for a fighting fund of $5000, claiming he had a fair chance of clawing back $818,000 from Wagil Ltd – another Singleton company, which owes SMG $463,000.
Pronk alleged Wagil owed another $355,485, a debt which had been satisfied by “insolvent transactions” – a payment made when a cash-strapped firm pays one creditor to the disadvantage of others.
Pronk said his lawyers advised “good prospects of success in recovery proceedings”.
Singleton, speaking from Auckland at the time, disputed Pronk’s claim: “There’s no debt as far as we’re concerned.”
However, while a random Mountain Scene ring-round in September found three local creditors willing to contribute to the fighting fund, most creditors were obviously unwilling to risk good money after bad.
Mountain Scene asked the Official Assignee why it wasn’t prepared to use the “Liquidation Surplus Account” to pursue Singleton’s Wagil company.
The Ministry of Economic Development’s little-known Liquid-ation Surplus Account assists recovery actions where creditors are unable or unwilling to fund them.
The Official Assignee says using the LSA was rejected as “not being fair and reasonable”.
“There did not appear to be a sufficient element of public interest in the proceeding [against Wagil] to justify LSA funding in the absence of full funding by creditors,” the Official Assignee says.
Official records show Singleton is either director or shareholder of 38 companies – 19 have been struck off or are in liquidation.
Despite SMG’s failure, Singleton still has a financial interest in The Rees – another of his wholly-owned companies has the hotel’s management contract.