Property magnates the Chow brothers have bought the troubled Stonewood Homes, offering a "significantly better" deal than their rivals.

The company, New Zealand's third-largest home builder, was placed in receivership on February 22, with 110 uncompleted homes and debts to unsecured creditors of around $15 million.

KordaMentha receivers Grant Graham and Neale Jackson confirmed the sale on Wednesday to Inno Capital, a company owned by the Michael and John Chow and finance specialist Clint Webber.

GEORGE HEARD/FAIRFAX NZ Stonewood Homes was placed in receivership in February, with 100 unfinished homes.

It comes as the Inland Revenue Department (IRD) files liquidation proceedings against Stonewood, in a move that is expected to put the companies' management under the microscope.

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The Chow brothers, whose assets include commercial property, hotels and strip clubs, said the deal covered both the national franchise rights and the Christchurch franchisee.

IAIN MCGREGOR/FAIRFAX NZ Garrit Van T Veen's scaffold company is owed $138,000 by Stonewood Homes.

They came out on top after three other parties put in offers.

"Stonewood complements our office, retail, accommodation, and car park property portfolio," John Chow said in a statement in Christchurch on Wednesday.

"This purchase signals our clear intention to repair recent damage to the brand and to re-establish the Stonewood brand nationally on a very firm footing."

Shortly after the company was placed in receivership, 41 of its 85 staff were laid off.

Last Thursday, the Chow brothers and Webber met the 44 remaining employees of the company and offered them "new contracts on similar terms", they said in a statement.

NOW WHAT FOR AFFECTED CUSTOMERS?

The sale takes the 110 affected Stonewood customers a step closer to a solution, but gives no certainty over when their homes will be completed.

Some have already braced themselves for months of delays, and have concerns their unfinished homes may be vandalised or stripped bare by angry sub-contractors.

In some cases, where minor finishing work was required, homes were handed over to owners, the receivers said in a letter to customers on Friday.

"Inno Capital is working case-by-case and I would expect them to complete the lion's share of the contracts," Graham said.

Under the terms of the sale, Graham said Inno Capital had the right to take over all remaining contracts.

Graham said if the new owners refused to take over a build contract, they would work with the Registered Master Builders Association to ensure the Master Build Guarantee was honoured.



Webber, of Inno Capital, said the next step would be to engage with customers of uncompleted homes.



"It's vital we provide certainty for customers who have been affected. We have a management team of 11 here in Christchurch to seal the deal but we ask for tolerance from affected parties," he said.

Michael Chow said they all understood the stress it would cause families and the elderly, so "we will be prioritising to individual needs".



"We also need to talk with Master Build to ensure build guarantees are honoured, and engage with local district councils to ensure building consent processes run smoothly."

THE 'PROMPT' SALE

Graham said four parties offered to buy parts or the entire business during the sale period.

Although he could no disclose the sale sum, Graham said they extracted a "significantly better" price from Inno Capital compared with other offers.

Now, the receivers would work through what they believed each creditor was owed.

"Our obligation [now] as receivers is to work out what we believe each creditor, or category of creditors, is entitled to receive. That process starts now but it will take time as there are a variety of complex claims."



Inno Capital was also expected to retain the current workforce, which had already been cut in half to 44.



"A lot of the interest wasn't going to preserve jobs, but hat's a very good by-product of this."

After more than a fortnight of uncertainty, the "prompt sale" was the best possible outcome in the circumstances, Graham said.

"The successful completion of this sale will provide much-needed certainty regarding the individual status of each build and confirm the way forward for all affected parties, including staff," Graham said.

IRD SEEKS STONEWOOD LIQUIDATION

Meanwhile, the Commissioner of Inland Revenue has filed liquidation proceedings against Stonewood Homes New Zealand Ltd and Stonewood Homes Ltd, the High Court in Christchurch confirmed.

The proceedings were filed on last Thursday. Although it is yet to be advertised, it is understood the hearing will take place on April 21.

An IRD spokesman said he was unable to comment due to taxpayer secrecy provisions under the Tax Administration Act.

Graham said the proceedings would not affect the receivership and sale of the company.



He said the receivers, appointed by secured creditor ASB Bank, had a duty to act in the interests of affected creditors, while liquidators had stronger powers to look at where the company went wrong.

"A liquidator, conversely, has a more backward looking role. While they would deal with any assets still to be recognised, in this instance they would look at why the company had failed and the actions of the directors and any voidable transactions that may have occurred."

