The Wakatipu’s most prolific subdivider has gone bust – for the second time.
John Reid, 71, was bankrupted on March 15 in the backwash of the crash of Bob’s Cove Ltd, according to National Business Review.
The company was a joint venture between Reid and the notorious McEwan Group – which has also crashed, culminating in the bankruptcy of founder Dan McEwan.
Reid is listed as sole director of Bob’s Cove.
As ever, he didn’t do things by halves – according to the Bob’s Cove receivers’ report, Guardian Trust is owed $5.2 million on a first mortgage and the failed Strategic Nominees $10.2m on a second mortgage.
Forty-five small shareholders, presumably introduced by the McEwan Group, also appear to have lost out.
The receivers say the company’s sole asset is a 42-hectare tract of land on the shores of Lake Wakatipu. NBR reports the 94-lot development has been abandoned and, going by comments in the receivers’ formal report, unsecured creditors shouldn’t hold their breath either.
The 10 unsecured creditors are owed $148,625 – and Inland Revenue wants $2163.
A Christchurch law firm and planning consultancy Paterson Pitts also claim $103,254 under a third mortgage, while four unnamed shareholders claim $800,000.
The Bob’s Cove collapse will be a bitter disappointment for veteran developer Reid, who is the former brother-in-law of Queenstown mayor Clive Geddes.
Reid’s biggest Wakatipu project was a $600m resort development at Walter Peak in the mid-1980s – Geddes was employed as property manager when the development consortium bought several CBD properties on this side of the lake.
But the actual development at Walter Peak never got off the ground, becoming a casualty of the 1987 sharemarket crash. Reid was subsequently bankrupted in 1990.
Elsewhere in the Wakatipu, however, Reid has had a more successful track record.
After opening up Kelvin Heights in the 1960s, the 1970s saw the Canterbury-based developer do the Wakatipu’s first rural-residential subdivision – in Dalefield.
Discharged from bankruptcy during the 1990s, Reid then became one of the earliest residential developers in Gibbston Valley.
In 2000, he told Mountain Scene: “There’s a demand for rural living you just can’t ignore.