Tag Archives: Bankruptcy

Delta: Update on Yaldhurst subdivision debt recovery

Election Year : The following item is offered in the public interest. -Eds

Received.

From: Gary Johnson
Sent: Friday, 19 February 2016 5:18 p.m.
To: Elizabeth Kerr
Subject: 160219 Media Statement_Delta half year results – update on Yaldhurst subdivision debt recovery

Elizabeth

We see there has been interest on the What if? Dunedin… on the current position on Delta’s recovery of an outstanding debt related to the Yaldhurst subdivision, Christchurch.

I hope the attached information provides a useful update, ahead of Delta’s half year report for the six months to 31 December 2015, due for release next week.

Kind regards, Gary

Gary Johnson
Marketing and Communications Manager
[Delta Utility Services Ltd]

ATTACHMENT [click to enlarge]

160219 Media Statement_Delta half year results - update on Yaldhurst subdivision debt recovery (scanned)

Related Posts and Comments:
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
21.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 20.3.14 Delta: Report from Office of the Auditor-General

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

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Filed under Business, Delta, Dunedin, Economics, Geography, Infrastructure, Name, New Zealand, Project management, Property, Resource management, Site, Town planning, Urban design

Delta / DCHL not broadcasting position on subdivision mortgagee tender

Election Year : The following opinion is offered in the public interest. -Eds

Received from Cr Lee Vandervis
Sunday, 14 February 2016 at 10:43 p.m.

█ Message: An individual interested in the Noble [Yaldhurst Village] subdivision but who wishes to remain anonymous has sent me the attached photograph and the following comment. I believe that it is in the public interest for this comment to be published, as it is largely confirmed by information I have been receiving from interested parties in Christchurch over the last two years.
It seems remarkable to me that the current Yaldhurst subdivision mortgagee sale process has not been widely reported or commented on, especially as DCC’s Delta is so heavily invested in what was always a risky subdivision, a very similar scenario to the Delta Jacks Point/Luggate subdivision that lost $7-9 million.

Yaldhurst Village site received 14.2.16Delta heavily invested in failed Yaldhurst land subdivision, Christchurch

“Taken 13 February.
These are the only residents likely on this piece of land in the near future.

There are pylon radiata right through the land.
According to someone who lives in the subdivision next door, the Noble owner agreed with the next door owner that there could be a road which goes through both subdivisions, which would allow more sections to be developed on the next door land. Apparently he reneged on the deal so as he could put more sections on the Noble land. In the event he has since died, and both NZTA and the Christchurch City Council have not been allowing the subdivision to be signed off because the roads developed on the land are not sufficient for either reading in general or for roads which a Council will take over when the subdivision is complete.

So the number of sections Noble wanted to squeeze out of the land determined the roads which are not right for the land.

It is being advertised as a block of land, without taking into account the infrastructure put in I guess by Delta, because it looks like you would need to start from scratch.

Someone shifts the cows around the land to keep the grass down.

I could not even find a gullible cow who would tell me they thought the land was worth the $10 to $15 million we are pretending Delta could get out of any possible sale, even if they were the first call on the proceeds rather than being in line after a mortgagee or 2 as well as any others with priority claims.”

[ends]

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

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Delta #EpicFail —Yaldhurst Subdivision ● Some forensics

Election Year : The following opinion is offered in the public interest. -Eds

Noble subdivision in Yaldhurst empty sites 2013 [Iain McGregor-Fairfax Stuff.co.nz]Noble subdivision in Yaldhurst 2013. Iain McGregor/Fairfax

Received from Canterbury Driver [CD]
Fri, 29 Jan 2016 at 1:01 a.m.

Subject: Delta and how to hide $10M

This correspondent was curious to know the extent of Delta’s exposure on their failed attempt at the Christchurch subdivision market. DCHL chairman Graham Crombie becomes more bashful than a teenage boy at his first disco when discussing the potential numbers in the media. Mr Crombie coyly advises that “millions” are owed and he is confident “millions” will eventually, in the fullness of time be received, albeit a few less million than is owed. Link

Of course, as John Maynard Keynes famously said, “in the long run we are all dead”, and this is also clearly the view of the financier (named by The Press last year as Southpac Property Investments) who has watched years roll by with no interest or repayments, and has called in the mortgage.

However much Mr Crombie wishes to hide in the corner, desperate to be ignored, clutching tight to his chest those precious numbers, he has been upstaged. His CEO Grady Cameron, has tantalised us with a peep of a disclosure in his opening statement in the 2015 Delta Annual Report on the DCC website. Mr Cameron confirms without being specific that Delta have “an outstanding debt” on a Christchurch subdivision and that the “fair value” of the secured debt is independently valued at $13.2M. He notes helpfully that this value was up from $12.8M last year. We can all relax now….

Thus we know that $13.2M is included as an asset somewhere in the Delta accounts. Delta says it has $59.705M of assets in its summary on page 15. But does it really ? Page 25 shows the breakdown of assets with $25.244M of the $59.705M being “trade receivables”. (The rest of the assets are basically plant, equipment and property.) At page 46, in “Note 23” safely buried far from public scrutiny, lies the smoking gun of Delta’s financial assets of $25.244M. There it is, a provision for “Less estimated doubtful debts” of $9.761M, that reduces the figure to $25.244M. This is a highly original description for bad debts, but desperate times call for desperate euphemisms.

So let’s be clear here – more than half of Delta’s financial assets ($13.2M) – amount to a bad debt in a failed subdivision, that is

a) now under mortgagee sale

b) has a third (or fourth) tier finance company as first mortgagee (because the banks would not lend on it)

c) that was built incorrectly, with the incorrect sized roads

d) faces ongoing legal action

e) cannot have titles released

f) has noisy 33KV powerlines running through it

g) has been completed since 2013 with no money received.

Continuing on, the news for the Owners (us) becomes more dire. The $9.761M “doubtful debts” included a carry over amount of $4.837M from 2014, which in turn included a $1.932M provision in 2013. The Yaldhurst (aka Noble) subdivision turned bad in 2012-2013, so it is very likely that the vast majority of the entire $9.761M is a bad debt provision for this heinously bad decision.

What it means is that Mr Crombie cannot possibly be “confident” of having a large proportion of the debt repaid. A large proportion has already been written off, it seems. This is not a “timing issue” as he claims. Delta has already written off up to almost $10M. That would put the total Delta exposure in excess of $20M.

Mr Crombie needs to identify how this proposal came to be put to the Delta board and which board members and executive staff supported it. Releasing board minutes on this item would be helpful for interested ratepayers to understand the history. Mr Crombie should also provide a comprehensive, clear and truthful report to Dunedin City Council with the full facts of Delta’s position and how the council-owned company got into this mess. This may be awkward for Mr Crombie as the people concerned will be well known to him but that is the price and the consequence of the position he chose to accept.

Under a worst case scenario, if Delta recovers very little of the $13.2M they say they will get, their solvency is threatened. Up to 80% of the Delta shareholders equity of $15.804M will disappear, with just $2-3M left. That would mean the shareholders equity to debt ratio would be out of this world. Delta has $26.852M of debt (to DCC). To build back up to the current equity position, which at $15.804M is not high, would mean years of retaining earnings within the company with no dividends to Council. Delta’s position would be so weak that the Council would either have to inject funds or DCC treasury would foreclose on its own company….

Delta in 2015 paid DCC a dividend of $2.5M. Without this in future years there will be significant rate rises each year.

That is bad enough but the bigger issue is how, after similar multimillion-dollar Delta debacles at Luggate and Jacks Point, was this allowed to happen. Dunedin ratepayers owe thanks to Cr Lee Vandervis. His has been one often lonely voice attempting to get to the truth of this matter. We must trust that he and any other like-minded councillors will be able to enforce some accountability onto Delta.

[ends]

Related Posts and Comments:
21.1.16 Delta #EpicFail —Yaldhurst Subdivision
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

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Filed under Business, DCC, DCHL, Delta, Democracy, Economics, Events, Infrastructure, Media, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning, Travesty

Delta #EpicFail —Yaldhurst Subdivision

Received from Christchurch Driver [CD]
Wed, 20 Jan 2016 at 6:35 p.m.

Last year Delta told Council and Dunedin ratepayers to return to their seats and not to worry about a bit of financial turbulence on the Yaldhurst subdivision, pictured.

Yaldhurst Village 1Yaldhurst Village 2Photos: CD 20.1.16

Delta are owed several million (possibly more) and the story was that all is well, even though they have been not paid for about 18-24 months because they have security over the land.

Sadly for Delta and its owners (us) a security means Jack Squat if the FIRST mortgage or prior ranking securities have not been paid.

And of course the first mortgage holder can simply choose to force the sale, and IGNORE lower ranking securities, until all their loan, penalty interest, selling costs, legal fees are covered.

The question of interest is – what is an unusable subdivision going to fetch, Jack Squat perhaps ?

Other Urgent questions for Delta:

1. How much is still owed ?

2. Have they been paid anything on this project in the last year ?

3. What do they know about the forced sale process ?

4. What is the total amount of debt secured against the property that ranks ahead of them ?

5. What is the range of the estimated mortgagee sale price – just a range is fine thanks !

6. Is the company owing Delta solvent, and does it have any other assets that can be pursued ?

7. Which group of directors at Delta authorised this multimillion-dollar project ?

8. Did Delta themselves know or check that the subdivision was not designed to the CCC requirements before they started ?

9. Will anyone be held accountable for this spectacularly inept decision to be involved and any loss resulting ?

[ends]

ODT 18.3.15 Expects Delta to be paid 'millions' [odt.co.nz] screenshotwhatifdunedin screenshot: ODT Online

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

12 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, Economics, Events, Infrastructure, Media, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning, Travesty

Noble property subdivision aka Yaldhurst Village | Mortgagee Tender

Updated post 21.1.16 at 4:35 p.m.

█ Tender now closes 4pm Friday 12 February 2016
http://www.realestate.co.nz/2702107

32.83 ha in 11 lots – http://www.realestate.co.nz/2702107
Listing # AH3988 Listed 28 Nov 2015
Tender closes Friday, 22 January 2016 at 4pm

Confirmation of site as that of Yaldhurst Village (Noble) at http://www.villagelife.co.nz/contact/

[click to enlarge]

Yaldhurst Village Mortgagee Tender [realestate.co.nz - Harcourts]

Yaldhurst Village contact information [villagelife.co.nz]

Yaldhurst Village location map [villagelife.co.nz]

█ Think DELTA. Delta Utility Services Ltd (453486)

█ Think long-in-the-tooth Delta Directors and their consultant(s).

█ Think Grady Cameron (overpaid chief executive).

█ Think Jacks Point and Luggate ($9 MILLION of Dunedin ratepayers’ money down the gurglar – represented as $6M in the Auditor-General’s report).

Same old crew. Same old formula?
Woopsie (Dunedin ratepayers $19 MILLION exposure at Yaldhurst Village – how’s that going – “climbing!”).

█ WHAT NOW ? ? ?

Related Posts and Comments:
20.7.15 Noble property subdivision —DELTA #LGOIMA
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

9 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Economics, Infrastructure, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning

Noble property subdivision —DELTA #LGOIMA

Received from Lee Vandervis
Mon, 20 Jul 2015 at 10:06 p.m.

█ Message: I am chasing answers to many questions regarding the Noble subdivision. Two LGOIMA ‘answers’ appear below.
Cheers, Lee

—— Forwarded Message
From: Sandy Graham [DCC]
Date: Mon, 6 Jul 2015 01:58:34 +0000
To: Lee Vandervis
Cc: Sue Bidrose [DCC], Graham Crombie [DCHL], Grant McKenzie [DCC]
Subject: Nobel Subdivision

Dear Lee

I refer to your request for information related to the Nobel Subdivision and respond as follows:

Q1. Can you please supply details and quantify the likely cost of the Delta/DCC exposure to the mortgagee sale of the Nobel Subdivision.
There is a very limited risk to Delta/DCC by way of mortgagee sale. There is however some financial exposure related to the subdivision and this was reflected in Delta’s Annual report for the 2014 financial year.

Q2. Can you please confirm the contractual details [preferably provide copies of the original and any subsequent contracts] that have led to our enormous exposure with the Nobel development.

All contractual details are withheld pursuant to section 7 (2)(h) of LGOIMA to protect the commercial position of Delta and further withheld pursuant section 7(2)(i) of LGOIMA to enable Delta without prejudice, to carry on negotiations.

When considering the request, the public interest was considered. This matter is currently before the Court in an effort to minimise any financial loss to the shareholder. We consider that protecting the legal position best meets the public interest at this time.

Given we have withheld information, you are entitled to a review of this decision by the Office of the Ombudsman.

I have cc’ed the original recipients of your request and the Acting CEO.

Regards
Sandy

Sandy Graham
Group Manager Corporate Services
Dunedin City Council

—— End of Forwarded Message

Note: Noble has been incorrectly entered as ‘Nobel’ by Ms Graham and Cr Vandervis in this exchange. -Eds

Related Posts and Comments:
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II….

Posted by Elizabeth Kerr

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Christchurch subdivisions: Heat gone?

Received from Lee Vandervis
Mon, 30 Mar 2015 at 10:37 p.m.

█ Message: Your readers may be interested in the claim in the following Press article that the heat has gone out of the Christchurch subdivision market with several other developments in trouble as well as Noble.

### stuff.co.nz Last updated 05:00 28/03/2015
Source: The Press
Gloomy outlook for solar housing in Christchurch
Has liquidation ended development dream?
By Liz McDonald
Is the vision of Highfield Park over? Fast-tracked by the Government and bigger than Hagley Park, the planned north Christchurch subdivision would have had 2200 solar-powered homes. The High Court this week placed its developers, Highfield Park Ltd, in liquidation over unpaid bills from engineering firm Tonkin & Taylor.

The 260-hectare subdivision site is a piece of farmland between Redwood, Mairehau and Marshlands. Its 2013 rezoning for housing was hastened under Earthquake Recovery Minister Gerry Brownlee’s new land-use plan but development stalled last year as the company struggled to find funds. In the meantime, the company’s options to purchase land for the development expired. Highfield Park Ltd is co-owned by the project’s founder, Christchurch engineer Roy Hamilton, his business partner, Brian Thompson, plus other investors.

Hamilton could not be contacted for comment following the court decision but he has previously confirmed the company had returned all section buyers’ deposits after missing project deadlines. Any creditors have until May 12 to contact liquidators about money owed. Highfield Park was intended to be New Zealand’s first solar-powered community and would house 5000 residents, offering ready-built homes as well as sections priced between $160,000 and $240,000. The plan included parks and two commercial areas with shops and cafes. Ground testing has revealed the land was a mix of TC1, TC2 and TC3 land, and needed some remediation. The first section titles were to have been ready by the end of last year.

An experienced Christchurch land developer, speaking on condition of anonymity, doubted anyone else would adopt the project. “The heat’s gone out of the market and it’s not a good time to start launching a major subdivision.” The developer said the Highfield project had struggled without control of the land or sufficient financial backing. He estimated up to $1 million could have been ploughed into the project already.

The development is not the only big-scale subdivision to have hit hurdles. Progress on Groynes Park near Belfast has stalled and its developers have managed to ward off liquidation bids from creditors. The company has promised work will resume soon. Ravenswood, half an hour north of Christchurch, is being offered for sale by developer Infinity Investment Group, which says the project is too big for it.
Stuff Link

Related Posts and Comments:
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II….

Posted by Elizabeth Kerr

3 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Economics, Geography, Media, Name, New Zealand, OAG, People, Politics, Project management, Property, SFO, Site, Town planning