However, the pair subsequently learned that the Inland Revenue Department (IRD) had live winding-up proceedings against the company.
The pair were prohibited from being appointed liquidators until consent was approved by IRD, which was granted in February.
The company operated two ECE centres, at 11A Kakamutu Rd, Ōtorohanga and 1 Commerce St, Putāruru.
Malcolm Pinny and Marlene Harvey were the directors and sole shareholders of both companies. Harvey has been approached for comment.
Pinny and Harvey told liquidators the cancellation of the licences for all three ECE centres by the Ministry of Education (MoE) on December 25, 2025 forced them to close, according to the liquidators’ first report.
The three centres were issued with a combined seven breaches for non-compliance for conduct between November 20, 2024 to December 24, 2025, according to records on the Office of Early Childhood Education.
The conduct reported to the MoE by the Education Review Office and through complaints included breaches of curriculum, management, child health and safety, premises and facilities, and governance/administration.
Each of the breaches resulted in the centres’ full licences being downgraded by the MoE to provisional licences, before being reinstated to full licences.
A provisional licence allows an ECE centre to continue operating and receive funding while it works toward compliance. The licence must be displayed on site, but ECE services are not required to notify parents.
After repeated breaches by Happy Sprouts’ three centres, all three licences were cancelled on December 25, 2025, removing their ability to operate.
Happy Sprouts Hamilton
Across the two companies, Happy Sprouts Hamilton has the better financial position, with an estimated surplus regarding creditors of $8789.
The company had one secured party with a registered security interest against it on the Personal Property Securities Register by the name of Early Childcare Holdings.
Liquidators have been informed by Early Childcare Holdings that nothing is owed by the company to this party.
As for preferential creditors, Farquhar and van Delden are in the process of determining if there are any unpaid wages, holiday pay or redundancy pay owing to former employees.
The IRD has not yet provided liquidators with a creditor’s claim form, but a review of the company’s accounts shows outstanding PAYE and other payroll deductions totalling $6611.33. This includes a preferential claim of $4106.36.
As for unsecured creditors, the IRD is owed $2504.97, while trade creditors are owed about $14,600.
Liquidators said it was too early to estimate whether preferential or unsecured creditors would receive a distribution, but at this stage the company’s assets outweigh its liabilities.
Happy Sprouts Educare
Happy Sprouts Educare owes significantly more to creditors, namely the IRD.
At the date of liquidation, three secured parties had registered security interests against the company, including the same non-owing interest by Early Childcare Holdings.
The remaining two parties include UDC Finance Ltd and Toyota Finance NZ Ltd, both for vehicles held by the company.
The company held five vehicles at the time of liquidation, all of which are subject to finance, with the exception of a 2011 Nissan Serena vehicle shared with the Happy Sprouts Hamilton business. This vehicle is set to be uplifted and sold by public auction.
A 2025 Jeep Grand Cherokee, listed as owing $49,729 to UDC Finance, was acquired at the same time the company was facing ongoing breaches of its ECE licences.
Prices for 2025 Jeep Grand Cherokees in New Zealand range from about $84,990 to over $119,990.
At this stage, $88,959 is owed to secured creditors for the four vehicles.
As for preferential creditors, about $18,574 is owed to former employees for wages, holiday pay and redundancy pay.
The IRD has one claim totalling $4329.01 in respect of costs and disbursements awarded by the High Court.
But the majority of debt owed is to the IRD for outstanding GST, income tax, PAYE and other payroll deductions, totalling $1,001,671.41. Of this claim, $479,356.32 is listed under a preferential basis.
Liquidators said it is possible that preferential creditors may receive a dividend in the liquidation.
As for unsecured creditors, the IRD is owed the remaining $522,315.09 for interest/penalties, with another $7939.44 owed to trade creditors.
Unsecured creditors were unlikely to receive any dividend in the liquidation.
All together, Happy Sprouts Educare owes creditors a preliminary total of $1,032,405.
Beyond the listed debts, liquidators said the company is owed funds by the MoE. The MoE has requested an audit be conducted after March 1 to confirm any amount owing to the liquidators.
The liquidators also note that a substantial amount is owed to the company by parents for unpaid fees, which the pair are investigating to determine if any recoveries can be made.
Farquhar and van Delden said of both liquidations that it was too early to determine a date for completion.
Tom Raynel is a multimedia business journalist for the Herald, covering small business, retail and tourism.
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