Food4Less New Lynn owes nearly $2.9 million to creditors, liquidator reveals

An Auckland supermarket has allegedly racked up debts of nearly $2.9 million to around 90 creditors, according to a liquidator’s report following its collapse earlier this year.

According to a report by the NZ Herald, Food4Less New Lynn was placed into liquidation by the High Court in February at the request of one of its creditors. The store is part of a wider chain of ethnic supermarkets operating across Auckland and Hamilton, though other outlets remain unaffected.

Liquidator Pritesh Patel of Patel & Co said two potential paths were considered after the business went into liquidation: either selling it quickly to preserve goodwill or shutting it down and selling off assets.

“Given that no lease would be available to any new buyer of the business, there was no option but to embark on the worst-case scenario,” the report said, NZ Herald has quoted.

The liquidation process moved quickly, with Patel noting the sell-down of stock and assets was completed within 11 days.

According to the NZ Herald, financial disclosures show secured creditors are owed more than $1 million, including about $550,000 to the Bank of New Zealand. Inland Revenue is owed approximately $425,000 in preferential claims, along with an additional $434,000 in unsecured debt. Trade creditors are collectively owed around $959,000.

So far, about $195,000 has been recovered through the sale of stock and equipment. These funds were used to pay outstanding employee wages and cover costs incurred after liquidation.

Company records list Romit Prakash as the sole director, with ownership held by U & S Chand Investments Limited. The company is jointly owned by Romit and Amit Prakash, NZ Herald has reported.

In a public statement, Romit Prakash described the closure as a deeply difficult experience.

“Recently, we received the difficult news regarding the liquidation process. Hearing those words was one of the most confronting moments of my professional life,” Prakash said, as quoted by the NZ Herald.

“Like many businesses, we have faced challenging circumstances over time, pressures that built quietly, decisions that carried weight, and realities that eventually could not be ignored, " the NZ Herald has quoted.

“Despite every effort, every long day, every late night and every attempt to find a path forward, we have reached a point where closing is the responsible step,” as quoted by the NZ Herald.

The liquidation highlights the growing financial pressures facing some retail businesses, even as other stores in the Food4Less chain continue to operate.