The first liquidators’ report revealed the company owed about $1.2 million, as at mid-April 2024.
However, a second liquidators’ report was released in December, providing more information about the company’s books and debt.
That report stated the company owed $4,196,508 to creditors (as at mid-October) including over $200,000 to staff.
That was after distributions had already been made to creditors of $235,008.
The $4.2m owed to creditors includes about $730,000 to preferential creditors (IRD and employees), $580,000 to secured creditors and almost $2.9m to unsecured creditors.
The liquidators’ report stated “we estimate that no funds will be available” to unsecured creditors as part of the liquidation process.
The report did not include a breakdown of each creditor, with liquidators citing the Companies Act 1993 and the Privacy Act 2020.
Euro City Limited owner Terry Elmsly said the $4.2m figure in the report was “grossly inaccurate”.
He claimed that was because his other companies represent the bulk of the unsecured creditors, meaning roughly $2.6m of the nearly $2.9m owed to unsecured creditors was essentially owed back to him.
“That money is owed back to my other associated entities that had advanced money to the business over time – I represent the bulk of the unsecured creditors,“ Elmsly said.
“Over the years, my wife and I advanced the company money from our other entities.”
Elmsly said that included money from his company T & C Investments, which had sold commercial properties in Auckland.
“We were constantly re-investing.”
He also claimed Euro City Ltd at liquidation date owned over $1m in unencumbered (debt-free) stock – mainly cars – when it went into voluntary liquidation.
The liquidators’ report stated $164,470 had been recovered from motor vehicle inventory, such as through auctions, and that process was ongoing.
Elmsly cited Covid lockdowns, supply issues, Cyclone Gabrielle, issues with property developments in his wider portfolio and, in his opinion, a poor economic environment led to the voluntary liquidation.
He said he believed there were enough assets to cover the remainder of what staff were owed.
As for money still owed to employees, $116,000 has been paid to employees since the liquidation process began, but $233,000 was outstanding for unpaid wages and holiday pay at the time of the latest report.
“We are unable to estimate at this time whether a further distribution will be paid to this category of creditor during the liquidation,” the report stated.
Elmsly is currently looking for a tenant for the property which formerly housed EuroCity on Prebensen Drive, which he owns separately from Euro City Ltd.
Liquidators have realised (recovered) about $900,000 as part of the liquidation process so far, of which $627,000 has been distributed. That included $235,000 to creditors, $175,000 to liquidator fees and $68,000 in legal fees among other payments.
There was also $275,000 in cash available at the time of the latest liquidation report, although ongoing fees were yet to be distributed.
“The liquidators will continue to realise all available assets, and will continue their investigation into the company’s books, records and affairs,” the liquidators’ report stated.
Gary Hamilton-Irvine is a Hawke’s Bay-based reporter who covers a range of news topics including business, councils, breaking news and cyclone recovery. He formerly worked at News Corp Australia.
