\u201cThe company [all firms] experienced a prolonged decline in trading performance arising from adverse market conditions. Sales volumes for Auckland central apartments declined materially from pre\u2011Covid levels.<\/p>\n
\u201cSale prices remained stagnant or reduced, resulting in a sustained decrease in commission income,\u201d the report noted.<\/p>\n
\u201cThe company\u2019s core market was disproportionately impacted by increased remote working arrangements, the loss of international students and short\u2011term accommodation demand, and a shift in buyer preference toward suburban and lifestyle locations.<\/p>\n
\u201cConsequently, the company\u2019s revenue declined by approximately 48% between the 2022 and 2025 financial years.\u201d<\/p>\n
Horrobin told the liquidator the company\u2019s directors had implemented \u201csignificant restructuring and cost-reduction measures\u201d in an attempt to save the businesses.<\/p>\n
However, revenue pressure continued and cashflow constraints emerged, including the accumulation of tax arrears to the Inland Revenue Department (IRD).<\/p>\n
The three companies were ultimately unable to meet their obligations as they fell due, and the companies were placed into liquidation.<\/p>\n
Large debts owed<\/p>\n
Looking at the firms\u2019 state of affairs, assets for all three companies are still to be determined.<\/p>\n
City Realty owes the largest amount, $3.6m. <\/p>\n
The company has a single secured creditor, Sharp Corporation, although it is still to be determined if the company has any debts owed.<\/p>\n
The IRD is owed $1.5m under a preferential claim for outstanding obligations, with a further $2m owed to unsecured creditors. Only one other creditor is listed \u2013 Brett Neilson.<\/p>\n
City Realty Sandringham owes $825,171.12, largely to the IRD for outstanding obligations of $417,875.25.<\/p>\n
The company has two listed secured creditors, Sharp Corporation and Flexicommercial. The latter holds a claim to all present and after-acquired personal property. Williams is still to determine if any debts are owed.<\/p>\n
A further $407,295.87 is owed to unsecured creditors, although none are listed.<\/p>\n
City Realty Wynyard Quarter owes $944,560.75, once again largely to the IRD for outstanding obligations of $468,432.27.<\/p>\n
A further $476,128.48 is owed to unsecured creditors, with no secured creditor claims listed.<\/p>\n
In total, all three firms owe a combined $5.38m to creditors of all classes.<\/p>\n
Williams said it is not expected there will be a dividend for any class of creditor, and could not estimate the duration of the liquidation.<\/p>\n
Asked to comment on the liquidations, Horrobin told the Herald it was a difficult situation.<\/p>\n
\u201c… and given how early things are in the process, I\u2019m not in a position to comment in any detail at this stage. I would, however, be happy to share some perspective once there is a bit more clarity and I am in a better position to do so.”<\/p>\n
Ray White Real Estate confirmed City Realty was no longer part of the Ray White network, with its franchise agreement terminated in February.<\/p>\n
\u201cAs the entity is now subject to liquidation processes, it is not appropriate to comment on the specific matters relating to their financial position or past operations,\u201d a spokesperson said.<\/p>\n
\u201cWe note that these are independent business entities, and their obligations sit with those entities. We will continue to respect the process currently underway.\u201d<\/p>\n
Tribunal trouble<\/p>\n
Horrobin and City Realty were fined $15,000 by the Real Estate Agents Disciplinary Tribunal back in May 2024<\/a> and censured for breaches linked to auditing processes described as \u201cseriously incompetent\u201d.<\/p>\n The licensed company, which operated a trust account that a chartered accountant audits, failed to provide its monthly reconciliations on time for 27 months across three financial years, with some provided more than a year late, according to the decision.<\/p>\n The tribunal said that among the numerous breaches committed over three years were the company\u2019s failure to record deposits received and the paying out of incorrect amounts from the trust account.<\/p>\n In particular, errors occurred on eight separate occasions in the financial year ending March 2020 and nine occasions in the following year.<\/p>\n