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• Major provider of the Government’s school lunch programme, Libelle Group, went into liquidation last week owing over $14.3 million.
• Liquidators said the company wasn’t able to purchase essential goods and services to enable ongoing trading after paying employee wages.
• More than 500 jobs are in limbo, with Compass Group New Zealand acquiring Libelle’s assets.

Libelle Group, a major provider of the Government’s school lunch programme, owes more than $14.3 million, according to liquidators.

Libelle went into liquidation last week leaving more than 500 jobs in limbo.

The food service provider had been contracted to deliver approximately 125,000 meals daily as part of the Government’s Ka Ora, Ka Ako Healthy School Lunches programme.

Robert Campbell and David Webb of Deloitte New Zealand were appointed liquidators of Libelle on March 11.

According to their first report, Libelle’s cash reserves were “exhausted” and it was no longer able to purchase essential goods and services to enable ongoing trading after paying employee wages on March 6.

“We understand that the director, after taking advice and considering alternative options, resolved to appoint liquidators by reason of the company’s liabilities and all other circumstances,” it read.

Libelle Group, one of the main providers of the Government's school lunch programme, went into liquidation last week.

The report said an investigation into the affairs of Libelle would be undertaken and it was not yet known if this would disclose any other reasons for liquidation.

It said Libelle owed $14,331,000, made up of $10,750,000 to secured and preferential creditors ($2,378,000 to preferential creditors and $8,372,000 to secured creditors), and a further $3,581,000 to unsecured creditors.

Among the list of creditors were at least 60 schools from across the country.

The report does not disclose the total value of the company’s assets, including vehicles, plant and equipment and stock, on the basis that “such disclosure may be prejudicial to the conditional sale with Compass”.

On the sale of Libelle to Compass Group New Zealand Limited - the group that contracted Libelle to deliver the school lunches - the report said it was apparent to liquidators that it was likely to be the only viable buyer.

It said liquidators did not intend to publicly disclose the purchase price consideration at this stage.

Companies Office records show Johannes Tietze is the sole director of Libelle. Johannes and Rochelle Tietze are shareholders in the company, along with a trustee service called TAL 120 Limited.

Libelle’s relevant assets were acquired by Compass NZ last week.

Paul Harvey, managing director of Compass NZ, said: “Our teams are united in our commitment to providing lunches every school day to tamariki in our communities.”

Compass said it was working with Libelle’s employees regarding ongoing employment arrangements.

Compass, assuming the role of leader, is one of three organisations – including Libelle and Gilmours – providing meals under the School Lunch Collective partnership, which was awarded the $85 million annual school lunch contract last year as part of Associate Education Minister David Seymour’s Healthy School Lunches reform.

The new programme only started rolling out to schools in January.

The Government has reassured students, parents and teachers that the free lunches programme is “not at risk”. About 242,000 students in the greatest need receive free lunches.

Seymour, who is in charge of the programme, said last week he had “clearly not” been happy with Libelle’s service.

The school lunch programme has faced a myriad of issues including late deliveries, lunches not turning up, complaints over the quality of food and one child suffering second-degree burns from a hot lunch.

School tuckshops across the country were forced to close last week following Libelle’s liquidation.

Libelle had been in business for more than 20 years, providing residential catering, tuckshop solutions and school catering services.

Cameron Smith is an Auckland-based journalist with the Herald business team. He joined the Herald in 2015 and has covered business and sports. He reports on topics including retail, small business, the workplace and macroeconomics.