So “business as usual” includes stealing?

Receivers could struggle to find a buyer for Dick Smith, with the firm’s receivership likely to signal the end of one of Australasia’s best-known high street brands, says a retail commentator.

A lending syndicate led by HSBC and National Australia Bank appointed receivers Ferrier Hodgson to the struggling electronics seller yesterday. Dick Smith – which operates 393 stores, 62 of them in New Zealand, and has 3300 employees – has itself appointed McGrathNicol as voluntary administrator.

The receivership comes after the retailer abandoned its profit forecast last month amid a sales slump that left the firm with high levels of excess stock, which had to be heavily discounted in the lead-up to Christmas.

Prices were slashed by up to 80% in the fire sale, but it failed to have the desired effect.

Yesterday, Dick Smith chairman Rob Murray said December sales had fallen below expectations. Read more »


The ultimate example of the perils of dealing with second tier financiers

No matter how well heeled one is, there can often be a time when a second tier financier is required to bridge the funding gaps the normal trading banks won’t.

Our main banks are conservative with a capital C but in a twisted manner. They take enormous risks funding home owners into mortgages that at times are greater than 95%. But when it comes to property development they will generally only fund upto 70% of the total costs and they expect to be the last cab off the rank but first ranking – reducing their risk exposure to almost nothing.

Developers often undertake huge projects. Hardly any developer will sit on millions just to plug into a development when logic persuades them to invest their equity.

That ultimately leaves the necessity of dealing with second ranking funders. The types of which existed in spades before the GFC when most in our country were wiped out.

Most second ranking finance companies are scoundrels and owned by private individuals. Half the time the Modus Operandi is to screw the developer and the financiers look for any opportunity to pull the rug on unsuspecting developers.

Hardly a surprise to see this developer have the embarrassment of ?having a trick played by a financier in the public domain. What is most interesting in this instance is that the developer has settled the matter which clearly signals he had no issues with finance and more clearly signals that the financier was the issue.

Tony Gapes is set to take back control of New Zealand’s most intensive affordable housing project after receivers last night confirmed the property developer has settled a company debt.

Some 420 apartments and townhouses are planned for the Springpark estate on a 10.5ha site in Auckland’s Mt Wellington. The first stage is expected to be completed next year.

Springpark is seen as an affordable homes project, with townhouses in stage one priced from $399,000 to $554,000. Most have already sold. ? Read more »

The Internet Party and Postie Plus. No, really

Postie Plus is in trouble. ?One News reports

Today staff were told the company, which has been dressing Kiwis for more than 100 years, has been placed in voluntary administration after racking up millions of dollars in debt.

“Last year they lost $10.6 million. I suspect that 2014 was going to be heading towards an even worst result,” says Martin Allison of investment managers Craigs Investment Partners.

“The banks have said ‘enough’. The administrators have been called in.”

Oh bugger.

What does this have to do with the Internet Party, you ask?

Well, it gets ridiculous quickly, but here it goes: ?The Internet Party leader, Laila Harre is a unionist from way back. ?In fact, she left a union (did she really? ?I doubt it)… let’s say she is on a sabbatical from the union, so her heart is still very strongly linked to industrial employment issues.

So, as you expect, upon hearing the news about Postie Plus, she took to Twitter


If I was Vikram Kumar and Kim Dotcom, I’d like her to focus on what I was paying her for, but that’s not the issue right now. ?Look what happened next: ? Read more »

Government needs to shake up insolvency practice

The NBR had a great article on the weekend about the slow burning?Insolvency Practitioners Bill. Written by?Murray Tingey, David Friar and Wayne Hofer from Bell Gully it highlights why there needs to be some controls and licensing around insolvency practitioners.

More than two years after the Commerce Committee reported back on the Insolvency Practitioners Bill, Parliament took up the second reading of the Bill on September 26 ? the next step in what has been a long and protracted process.

Under the current law, the restrictions on who can be an insolvency practitioner (such as a liquidator or receiver) are limited.? You must be over 18, not bankrupt or subject to the Mental Health Act, not related to the company, and not have a dishonesty conviction in the past 5 years.

There is no requirement that the practitioner have any minimum skills, qualification or experience, or even any requirement that the practitioner live in New Zealand.? There are also difficulties in enforcing the requirements as to who can be an insolvency practitioner. ? Read more »