Adverse publicity given as reason for failure

Press, Volume CXII, Issue 33062, 1 November 1972, Page 12

Adverse publicity given as reason for failure

The directors of a house spray-painting company gave bad publicity about their product contained in an article in a national weekly newspaper as one reason for the liquidation of their company when they met creditors yesterday. The two directors of Texacote Industries, Ltd, Mr N. L. van der Lem and Mr R. J. M. Hofstee, admitted that there were liabilities of $11,799 and that there was likely to be deficit of about $lO,OOO. Mr van der Lem, secretary of the company, said that there was a marked falling-off in trading before the order for winding-up was granted. There had been a good deal of adverse publicity against the spray coating of houses. This had caused a rapid fall in sales and completion of contracts. His company had also been dogged by the activities of salesmen working for other companies in the same business. Business had also worsened during the winter when it was impossible to work for much of the day because of ■ the wet conditions. Work(men had been sent to the 'West Coast, but the weather had been no better there. The company had lost between $3OOO and $6OOO as a result.

Mr van der Lem said that the company had also spent too much on advertising and had been threatened with legal proceedings over the name of the company. Loss of Chemist

The company’s activities had also been impaired by 'the unexpected departure of I the employee chemist, who was the only person with the | secret of how to mix the i paint. Texacote Industries, Ltd, was incorporated in August. 1971, with a nominal capital of $l5OO. Its objects were to carry on the business of manufacturing, distributing, and applying plastic coatings. The Official Assignee (Mr I. A. Hansen) who is liquidator. said that the company’s

assets included stock in trade worth $lOO, machinery worth $2302, and book debts of $1967. There were sundry smaller items and realisation of all assets would yield about $2200 to $2500. Mr Hansen said he had disposed of a quantity of paint owned by the company. Without any brand on it the paint was valueless. He said there appeared to be a lack of organisation in the company. “Perhaps it was these men setting up a company to do a job with which they were not truly familiar. I have not been given any cause to suggest that a thorough investigation be carried out. There is no question of fraud,” he said.

The meeting failed to nominate a committee of inspection or a liquidator other than Mr Hansen.