Du Val Group’s statutory receivers have discovered businesses facing eight separate sets of legal proceedings and said their powers over the proceedings will not result in anything being halted.
PwC searched all court
Du Val facing eight active legal proceedings: Receiver PwC reveals tsunami of litigation
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Eight cases where Du Val entities are defendants include:
- A creditor is suing Blue River Holdings in the High Court at Hamilton for $59,000. The company was previously called Du Val Construction;
- Three liquidation applications in the High Court at Hamilton seek liquidation of Blue River. The total debt claimed by the creditors is about $880,000. Applications are due to be heard in September 2024;
- Downey Management v Amble Valley, previously called Du Val Developments. High Court proceeding is a dispute between Lakewood Plaza Limited Partnership parties. Amble Valley and Kenyon Clarke are defendants, together with various other entities not in receivership. The trial is set down for April 2026;
- Du Val Health Clubs Limited Partnership is one of 22 respondents to an application in the High Court to approve a scheme but PwC is yet to get details of this proceeding;
- Two further matters where Du Val entities are plaintiffs. In one case, there is a High Court trial set down for next April 2025 and an appeal in relation to an application for a freezing order;
- The other case has been filed but not yet served on any defendant. “We are seeking further information, and legal advice, in respect of those proceedings,” PwC said.
The Herald’s Jane Phare has reported how Du Val’s Charlotte and Kenyon Clarke went from champagne and private jets to receivership and PwC’s John Fisk estimated the Du Val Group had $250 million in liabilities.
The initial report from Fisk, Stephen White and Lara Bennett also went into detail about a proposal to convert money from 104 investors in the Mortgage Fund and money from 35 investors in the Opportunity Fund into shares.
An entity was then to be listed on the NZX.
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That deal was put forward in December 2022 in an attempt to restructure that part of the business.
An information memorandum [IM] issued on the deal referred to an internally produced valuation agreed to by the directors of $306m to $431m but did not include an independent or external valuation.
“Records indicate 48 Mortgage Fund and 18 Opportunity Fund investors agreed to subscribe for shares in DVPG, in exchange for their limited partnership interests, as part of the restructure.”
A number of professional advisers were also listed in the corporate directory but PwC found two of those advisers said they did not have any involvement in preparing that information memorandum.
In conclusion, PwC said the absence of a consolidated or complete set of records had prevented a full reconciliation in the time available.
“But we consider that many of these balances recorded as assets are unlikely to be recoverable.”
The sheer volume and complexity of businesses and balances in the wider group showed transactions had been done to meet liquidity needs without regard to whether these were in the interests of the entity advancing the funds.
The report identified accounting irregularities, complexities, lack of auditing and concerns about a trust in the name of the Clarkes.
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PwC said there are:
- Irregularities that warrant further investigation;
- Complexities which make it difficult to treat some of the members of the Du Val Group independently or separately;
- Risks to investors and creditors that would arise from a multiplicity of insolvency processes across the Du Val Group.
Anne Gibson has been the Herald’s property editor for 24 years, written books and covered property extensively here and overseas.
