The sale of van Eyk Research Australasian assets over late 2014 to early 2015 may have fetched just a tad over A$1 million, the latest liquidation documents suggest.
According to a just-released Australian van Eyk liquidation report, sale proceeds – likely relating to Lonsec’s 2015 purchase of the failed firm’s iRate research tool and clients – amounted to just A$525,000.
Meanwhile, it is understood the NZ arm of van Eyk – essentially the rump of the group’s fund management business, including the roughly $65 million Perpetual Portfolio Superannuation Fund – sold to Saturn Invest for about NZ$700,000 late in 2014.
Based on prevailing currency rates, the total van Eyk sale proceeds would’ve amounted to just A$1.1 million for what was once the largest retail fund research firm in Australia with a funds arm peaking at about $2 billion under management.
The latest van Eyk Advice NZ liquidator’s report, published early in February by KPMG, holds little good news for the group’s creditors who have collectively outstanding claims of about $1.5 million on the firm.
According to the KPMG report, van Eyk Advice NZ had about $9,400 in cash as at the end of 2015. The entity also has a shareholding in related firm, Blueprint Investment Management Limited (BIML) – the business bought by Saturn just prior to BIML also entering liquidation in 2014.
The September 2015 BIML liquidator’s report says the group was expected to cover most of its debts.
“It is anticipated that a significant distribution, if not payment in full, will be issued to the Company’s creditors, dependent on the level of costs of administering the liquidation, but most importantly agreeing a quantum (if any) of monies due to the Perpetual Portfolio Superannuation Fund, [PPSF]” the September 2015 BIML report says.
The accounts show BIML had cash assets of about $267,000 plus a due payment from Saturn of $100,000, with unsecured creditors claiming just under $42,000.
“In addition, we have received notification of a prospective claim from the Trustee of the PPSF of $305,000 in relation to refundable tax deductions made by the Company as Manager of the Scheme prior to its sale to the Van Eyk Group in June 2013,” the BIML report says. “Considerable research has been made into the legitimacy, or otherwise, of this provisional claim, which has not, as yet, been formalised by the Trustee [Public Trust].”
Meanwhile, in Australia the liquidator to van Eyk Research appears to have done a good-enough job to date, for a healthy fee of course, but creditors will only get some money if various legal actions are successful, according to the latest report from Pitcher Partners.
The demise of van Eyk Research (the dominant advisory and research house for the financial planning sector for many years) in 2014, has been the subject of much industry discussion, as well as litigation, and its drawn-out liquidation process is now also attracting industry attention.
One small victory for creditors has been over the Australian Taxation Office. According the Pitcher Partners’ report sent to van Eyk creditors last week, the “transactions which may have been preferential in nature” included a demand from the Australian Tax Office for $91,500. This has been settled at $55,000.
Elsewhere in the report, signed by liquidator Geoffrey Trent Hancock of Pitcher Partners, there was not much joy for creditors, but at least employees have been mostly covered. Under the ‘Fair Entitlement Guarantee’, which is the government system designed to protect employees during an external administration of a company, the liquidator has distributed $390,825 to a total of 19 employees. The executive director and largest shareholder, Mark Thomas, (including interests associated with him) has not received anything.
Pitcher Partners, which has been paid $730,000 to date, at an average-hourly wage of $435 for at least 12 staff and partners, is still trying to recover $375,538 from debtors. However, its main recovery possibilities involve ongoing litigation. So far the liquidator has realised only $459,455 of $928,900 it believes it has in “debtor value”.
With a current balance of just $2,639 for its “receipts and payments” calculations shown to creditors, the report to creditors says: “Any future recoveries in this matter are subject to litigation that is currently in the courts. Accordingly, it is not practicable to state whether or not there will be a dividend available to unsecured creditors.”
Most of the money recovered by the liquidator is an undisclosed sum from Lonsec Fiscal which purchased the former van Eyk financial planner database and technology platform known as iRate. The liquidator’s accounts record a sales proceeds figure of about A$525,000.
Pitcher Partners was called in as voluntary administrator to van Eyk Research on September 15, 2014 and then appointed liquidator on October 21, 2014 following the freezing of van Eyk funds management accounts known as Blueprint by its responsible entity, Macquarie Bank. That followed an investment in an alleged illiquid asset through a UK-based hedge fund manager. Legal actions are either underway or under consideration on the more substantive matters.
There are also various administrative matters which need to be concluded before the company can be wound up, the liquidator’s report says. These include dealing with GST refunds, post-appointment BAS, the liquidator’s own accounts being lodged with ASIC and de-registration of the company.
“Following the resolution of the matters discussed above,” the report says, “and given the extent of legal actions currently being explored for the benefit of creditors it is premature to provide an estimation as to the likely conclusion of the liquidation.”
NOTE: This article was co-authored by Greg Bright for Investor Strategy News, Australia.
Bright is a former non-executive director of Pyne Gould Corporation, which was a substantial shareholder in van Eyk prior to the Blueprint funds freeze.