Commerce and Consumer Affairs Minister Andrew Bayly says Du Val Group companies placed into statutory management after 'complex corporate failure'

The Government has put residential property developer Du Val Group into statutory management on the recommendation of the Financial Markets Authority (FMA), Commerce and Consumer Affairs Minister Andrew Bayly says.

"The Government has placed companies associated with Du Val Group, a developer of large-scale residential property projects in Auckland, into statutory management," says Bayly.

"Du Val Group has recently gone into interim receivership, leaving significant liabilities. The situation is complex and of such a scale that immediate intervention is required to prevent broader harm."

"Statutory management is the option of last resort used to deal with complex corporate failure where ordinary insolvency law is inadequate. It is intended to protect investors and creditors from further losses, and to enable the orderly administration of a company's affairs," Bayly says.

The FMA says it has "ongoing investigations" into the Du Val group. 

"The Corporations Act provides remedies to deal with complex corporate failures and is most appropriate where a company has, or may have been operating fraudulently or recklessly or, alternatively, where the ordinary law is inadequate to deal with an orderly wind up of the companies.  In this case, the FMA considers both provisions apply," the FMA says.  

The full list of Du Val entities placed in statutory management is here.

A previous entity placed in statutory management was South Canterbury Finance.

Here's Bayly's statement.

Du Val Group companies placed into statutory management

The Government has placed companies associated with Du Val Group, a developer of large-scale residential property projects in Auckland, into statutory management, Commerce and Consumer Affairs Minister Andrew Bayly says.

“Du Val Group has recently gone into interim receivership, leaving significant liabilities. The situation is complex and of such a scale that immediate intervention is required to prevent broader harm.

“Statutory management is the option of last resort used to deal with complex corporate failure where ordinary insolvency law is inadequate. It is intended to protect investors and creditors from further losses, and to enable the orderly administration of a company's affairs.

“Du Val Group is made up of about 70 entities, including 46 subsidiaries, and 20 special purpose vehicle limited partnerships. There are between 120–150 investors, home buyers and commercial lenders tangled up and given the number people involved it’s important we ensure the process is orderly and fair.

“By placing Du Val into statutory management, all current insolvency processes are suspended, enabling the affairs to be dealt with by one team of people, rather than multiple insolvency processes unfolding simultaneously.

“The decision to put the companies into statutory management follows a recommendation by the Financial Markets Authority (FMA). The FMA made its recommendation based on its ongoing investigations and following a report from the Court-appointed interim receivers.

“Following Cabinet’s approval, the Governor-General has made an Order in Council. This decision is effective from today.”

The order applies to four core Du Val Corporations and 20 associated persons (all limited partnerships), along with 46 subsidiaries. One subsidiary is excluded as it is 50 per cent owned by a third party and operates independently of the Du Val Group.

The Government has appointed John Fisk, Stephen White and Lara Bennett of Price Waterhouse Cooper (PwC) New Zealand as statutory managers. This follows their recent appointment by the High Court as interim receivers for the Du Val Group.

• The order can be found here.
• The full list of entities involved can be found on the PwC website.
• Du Val investors and creditors with questions on the statutory management process should contact PwC New Zealand at nz_duval@pwc.com. 

And here's a statement from the FMA.

FMA statement on Statutory Management for Du Val corporations 

The Financial Markets Authority – Te Mana Tātai Hokohoko – today confirmed that the Governor-General, on the advice of the Minister of Commerce and Consumer Affairs given in accordance with a recommendation from the FMA, declared a number of entities within the Du Val group be placed in statutory management under the terms of the Corporations (Investigation and Management) Act 1989 (the Corporations Act).   

Statutory management for these entities was announced by the Minister today, effective immediately. John Fisk, Stephen White and Lara Bennett of PwC New Zealand, who were appointed as interim receivers on 2 August 2024, have been appointed as the Statutory Managers. 

The Corporations Act provides remedies to deal with complex corporate failures and is most appropriate where a company has, or may have been operating fraudulently or recklessly or, alternatively, where the ordinary law is inadequate to deal with an orderly wind up of the companies.  In this case, the FMA considers both provisions apply.   

The FMA’s recommendation was based both on its own investigations and a report from the Court- appointed interim receivers, PwC New Zealand (Report).  The Report is currently subject to Court orders restricting its publication. 

The FMA considers that the conditions under the Corporations Act have been met, and is satisfied that statutory management is the most appropriate available option for each of the Du Val group corporations to which it has been applied, for the purpose of: 
 

·         limiting or preventing the risk of further deterioration of the financial affairs of those corporations;  

·         limiting or preventing the carrying out, or the effects of, any fraudulent act or activity; 

·         preserving the interests of their creditors or beneficiaries or the public interest; and 

·         enabling the affairs of the Du Val group corporations to be managed in a more orderly way. 

The FMA has ongoing investigations into the Du Val group. 

Du Val investors and creditors with questions on the statutory management process should contact PwC New Zealand at nz_duval@pwc.com. 

And here's PwC's statement.

Statutory managers appointed to Du Val group

At 18:00 on 21 August 2024, John Fisk, Stephen White and Lara Bennett of PwC New Zealand were appointed statutory managers of 70 entities associated with the Du Val property development group (“Du Val”). The statutory management suspends the Court-appointed interim receivership appointments that were made on 2 August 2024 for the majority of the Du Val group entities. A full list of the entities that are now in statutory management is attached to this release.

John Fisk, Partner, says, “We are keen to ensure construction works continue on the active construction projects Du Val has and that it is business as usual for the rental properties. Our initial focus will be to preserve and realise best value for all stakeholders. We will be communicating with all creditors and investors, and will be conducting a thorough investigation. We will provide creditors and investors with regular updates on the progress of the statutory management.”

Du Val is a developer of large-scale residential property projects in the Auckland area. The statutory management appointment was made following the submission of a report by PwC to the High Court. The initial receivers’ appointment was made by the High Court on application of the Financial Markets Authority (FMA) under the Financial Markets Conduct Act 2013.

Please direct any further enquiries regarding the appointment to the FMA.

Du Val investors and creditors with questions on the statutory management process should contact PwC New Zealand at nz_duval@pwc.com.