International News: Sensation Yachts

Sensation Yachts liquidator: “No funds whatsoever” to repay creditors.

By IBI Magazine. A new report by the liquidator of New Zealand’s Sensation Yachts says that financially troubled owner Ivan Erceg is unlikely to repay about NZ$40m he owes to unsecured creditors. Jonathan Barrett, working for liquidator McDonald Vague, said there are “no funds whatsoever” to pay 140 unsecured creditors. Most of the creditors are small businesses.

Sensation Yachts, which had a staff of 400 in its heyday, shut down production in November 2009. It went into liquidation last July. The company has been the target of two High Court bankruptcy proceedings in the last two months, by Hong Kong Shanghai Banking Corporation (HSBC) and Cayman Islands-registered company Balenia.

McDonald Vague told The Independent it had trouble gathering information from Erceg as part of its investigation. Its estimate of NZ$40m owed to unsecured creditors is different from the receiver’s report, which includes a list Erceg compiled showing unsecured creditors being owed NZ$636,542.

The report noted that the only preferred creditors likely to be paid are the Inland Revenue, which is owed NZ$87,106, and former employees, owed $76,312.

A separate report by the firm’s receiver says that Sensation Yachts owes over NZ$67m to preferred and unsecured creditors. That does not include the NZ$40m debt estimated by the liquidator.

Erceg claims to have security of NZ$63.5m over the company. About NZ$50m of that was underwritten by the estate of his late brother Michael Erceg. According to the receiver, Sensation Yachts has assets with a book value of about NZ$14m, but these may have dropped in value to only NZ$3m.

Erceg is believed to be living in a family-owned estate in the south of France.