MEETING OF CREDITORS OF COMPANY IN LIQUIDATION

Press, Volume C, Issue 29672, 16 November 1961, Page 10

MEETING OF CREDITORS OF COMPANY IN LIQUIDATION

‘•From a prelintinary examination otf the company’s affairs the deficierucy may exceed £10,000,” said Mr D. Malcolm, agent for the Official Assignee, at a meeting yesterday otf the creditors of Seafox Marine, Ltd. (in liqidation).

The report by the Official Assignee (Mr O. T. Grattan) said the nominal capital was £lO,OOO. All the capital bad been subscribed but no calls had been made. A man who was named as secretary of 'the company disclaimed ever having held that office and said he had been only foreman or factory manager.

The meeting, at which about 35 persons were present, confirmed the appointment of the Official Assignee as official liquidator of the company. It also carried a resolution that an application made to the Supreme Court for the appointment of a committee of inspection to act with the liquidation, the members to be Messrs F. A. Judkins, G. G. Parry and D. H: Kernaban. A summary of the statement of affairs of the company by the Official Assignee Showed the amount owing to 135 unsecured creditors as £10,917 14s lid. The assets were shown as cash at bankers £ll9 17 s Bd, stock £3500, machinery £BOO, trade fixtures £275, motor-car £4OO, making a total of £5094 17s 8d; less preferential creditors £238, less debenture over assets of the company £lOOO. This left an estimated deficiency of £7060 19s Id. Causes of Failure The Official Assignee made the following statement on the company’s affairs and the causes of its faillire:— The company is a private one incorporated on July 28, 1960. The nominal capital is £lO,OOO. Affl the capital has been , subscribed, but no calls have been made. “The company commenced business under the name of Fidelity Guarantee (Otago), Ltd., as a finance company in Oarnaru and subsequently changed its registered office to Christchurch and the name to Seafox Marine, Ltd, on February 13, 1961.

“Some six months after commencing business in Ohrirtchurch, the company was apparently embarrassed for lack of finance and obtained accommodation from a finance company giving as security a debenture and a chattel security over the whole venture. In addition the main shareholder, Mr O O. Wahrlich gave as collateral security, an unregistered mortgage over a house property. The holder of the debenture entered as receiver on September 21, 1961, end has not terminated bis receivership.

“The causes of the failure of the company appear to be failure to obtain the liquid capital to establish the undertakings, high overhead expenditure.. time lag in production of finished articles, waste of effort on unnecessary sidelines, lack of revenue through inability to sell boats in spite of extensive advertising, a manufacturing programme which was mucti too ambitious for the financial resources of the company plus the sole director’s lack of technical knowledge.” History Of Company The company was incorporated as Fidelity Guarantee Corporation (Otago), Limited, with its registered office at Oamaru. with a nominal capital of £lOO, said Mr Malcolm in a statement on the history of Seafox Marine, Limited. “The original shareholders were O. O. Wahrlich 99 shares and E. B. S. Gray one share. The original secretary was Mr K. T. Cusack appointed on July 11, 1960. On September 26, 1960, Mr Wahrlich appointed himself secretary. He is, and has been, sole director from the date of incorporation to the winding-up order on October 27 1961 "On February 13, 1961, the name was altered to Seafox Marine Limited and on the same date the articles of association were altered to permit the issue of redeemable preference shares with a fixed cumulative preferential dividend of 10 per cent, with other rights. The capital was increased to £lO,OOO. The whole of this additional capital was subscribed by O.

6. Wahrlich but nothing has been paid up. According to the records Mr Wahrlich holds all the share capital except one share held by Mr Gray. _ “On February 13, 1961, Mr R. S. Abbott was appointed secretary. He resigned on July 11 and Mr John Simpson was appointed in his place. “On August 14, 1961, a debenture was given to Janitor Finance Limited over the entire undertaking. In addition there was given a chattel security over the stock and plaint. Mr Wahrlich gave an unregistered mortgage over his house for the amount of the advance of £2OOO. “On November 13. Mr Wahrlich filed his petition in bankruptcy. “The assets of the company appear to be considerably less than the figures shown in the summary of the statement of affairs.” said the statement by Mr Malcolm. Director Questioned

Mr Wahrlich, who was represented by Mr R. S. D. Twyneham, agreed that the statement made by Mr Malcolm was correct. In reply to questions by Mr Malcolm he said that he had had other companies. They were wound up. He had intended changing the business from moneylending to boat-build-ing and that was why the name was changed. He had complete confidence in the future of the business until he took all the books to Mr Abbott.** He still had confidence the business would be all right but on Mr Abbott’s advice he decided to call a meeting of creditors. Mr Wahrlich, replying to Mr J. E. Millar, representing a creditor, said Fidelity Guarantee Corporation lent £l2OO to Seafox Marine, Limited, and he wrote a certificate for 1200 shares to Fidelity Guarantee Corporation to cover the amount. As sole director, of Fidelity Guarantee Corporation he gave a verbal guarantee to himself as sole director of Seafox Marine, Limited, said Mr Wahrlich to Mr Parry. .'Disclaimer Mr John Simpson, represented by Mr R. J. De Goldi, made a statement disclaiming

that he was or ever had been secretary of the company. He was a carpenter and joiner and had been foreman or factor; manager. He had signed a document because Mr Wahrlich had asked him to do it but he did not know it was a company annual return. Mr Wahrlich said he had mentioned to Mr Simpson that he might make him secretary. He had put the document before Mr Simpson. It was the accountant who had done so. The meeting was adjourned sine die.