A report by liquidators has shown how the ever-changing Covid alert levels in New Zealand pushed Auckland’s ASB Showgrounds over the edge.
The surprise announcement that one of Auckland’s largest venues had gone into liquidation was made last week.
Attempts to reduce its rent and offering redundancies could not save the venue which owes millions to creditors including ASB Bank and the Inland Revenue.
The 16 employees who remained were this year all made redundant but were re-employed on casual contracts, according to Paul Vlasic of Rodgers Reidy.
While all the venue has paid all staff wages and holiday pay, $211,000 in redundancy payments was still outstanding.
“Prior to liquidation, the board had worked with a number of parties to try and determine a way forward that would have enabled the continued operation of the board and prevented the need for appointment of a liquidator,” the report stated.
“This included engaging external advisers to liaise directly with their significant creditors, council and government agencies.
“While support was offered from a number of these parties, including considerable accommodation from the board’s bankers, collectively this was not sufficient to resolve the financial situation the board [faced].”
The venue was only able to operate at alert level 1 which resulted in “significant losses” last year and into early 2021.
“The board has advised that the reason for insolvency was due to the Covid-19 pandemic and the impact that this has had on the board’s ability to run events, coupled with increasing rental costs in Auckland,” the report said.
The board leases land owned by the Cornwall Park Trust Board, but the agreement “did not provide for any lease concession” because of the pandemic and alert level changes.
The board spent around $725,000 on legal fees challenging a proposed rent increase from $750,000 a year to $2.3 million.