The sale of the business and related fixed assets returned $515,000.
A further $138,596 was recovered through the sale of other fixed assets at auction.
The liquidators said they made distributions to secured creditors totalling $341,212. This included $310,961 relating to a claim from Heartland Bank.
Preferential employee wages and holiday pay of $37,852 was paid in full. However, a further $19,808, classified as non-preferential claims, was not distributed.
Inland Revenue received just $15,469 out of its $259,048 preferential claim.
Other distributions included liquidators’ fees ($183,665), legal fees, agents’ commission and contractor costs.
Unsecured creditors, who were owed $1,802,583, received nothing, according to the report.
A shortfall of $313,930 is left owing to secured creditors, along with $243,579 in preferential claims.
“Based on the realisations during the liquidation, there was a shortfall in respect of IRD’s preferential claim, and there were no funds available for distribution to the unsecured creditors,” the report said.
It also noted that company records showed amounts owing to PMSI holders – classed as secured creditors – totalling $344,181. However, “… [A] tracing exercise was undertaken to determine the value of the inventory subject to these security interests and the relevant collateral was assessed at $30,251, which was distributed to PMSI holders in respect of their claims. In the absence of collateral, the remaining debt is effectively unsecured.”
‘Cannot continue without creditor support’
The Herald reported last year that Little Island’s directors had sought creditor support before going into liquidation on two occasions, but were knocked back.
In a letter to creditors dated April 17, seen by the Herald, Little Island director Wade Gillooly said the company had been in a difficult financial position over the past five months.
“Given the difficult position we find ourselves in, we cannot continue without creditor support to resolve our arrears, and we need to formally propose a creditor compromise on the outstanding balance owed to your business as at March 31, 2025.”
An offer of $0.60 to the dollar to be paid by March 31, 2026, was proposed and rejected.
In a letter to creditors on May 7, the company offered a revised creditor compromise, guaranteeing an interim payment of $0.25 to creditors on August 1, 2025, with the remaining $0.35 to be paid by March 31, 2026.
The company was placed into liquidation on June 13, 2025, by a special resolution of shareholders.
Cameron Smith is an Auckland-based business reporter. He joined the Herald in 2015 and has covered business and sports. He reports on topics such as retail, small business, the workplace and macroeconomics.