PYRAMIDS OF DEBT

Press, Volume CXV, Issue 33964, 3 October 1975, Page 1

PYRAMIDS OF DEBT

Two pyramid-selling companies which grossed $150,000 in less than a year used half that amount in costs and travelling expenses, a meeting of creditors for one of the companies was told yesterday.

(’losing-down orders! were placed on (oinbined Community Marketing. Ltd. in April. 1971. and the company! is now in liquidation after a winding-up order ! made in August.

The other companv was Posipow International, ltd The two companies were formed to sell sets of lectures on positive thinking

These were sold on a pyramid basis, employees of the companies selling the material to other employees and so on to the customer, each sale netting the seller a commission.

The meeting was told that although the two companies had grossed $150,000. only $2400 worth of improvement courses had reached the public. Salesmen were paid with about $75,000, and the rest iwent in expenses.

There was no quorum of creditors at the meeting, and it was adjourned sine die. The Official Assignee <Mi 1.

A Hansen) said he found it very odd that the petitioning creditor had not attended the meeting

He said that although Post pow was verv much a live issue last year, it was now a damp squib No purpose would have been served through a public examination of the shareholders undet the Companies Act. said Mr Han sen

Fifty per cent of the shares of Combined Communitv Marketing. Ltd. were held bv Barrv William Ferguson, and it was Mr Ferguson who headed the company's sell ing programme rhe remaining shares were held bv his wife.

Mr Ferguson was adjudged I bankrupt on his own petition |on September 2. and the ere jditors meeting was held yes I terdav.

A summary of the affairs lof the company showed that lit had 16 unsecured creditorand one preferential creditor on the Inland Revenue Departjment. who were owed $9390 |Total liability was $17,126. and this was also the deficiency of assets to meet lia bilities. since there were no assets in the companv

[Personal debts. P.2]