Guthrie Secs placed in liquidation

Press, 23 February 1989, Page 35

Guthrie Secs placed in liquidation

PA Auckland Guthrie Securities, an associate company of Guthrie Financial Corporation (in receivership), was yesterday placed in liquidation by a meeting at which many creditors asked about their bullion.

The appointment as liquidators of Messrs L. G. Chilcott and P. C. Chatfield, formerly the provisional liquidators of the company, came at the end of the well attended and sometimes acrimonious creditors’ meeting in Auckland.

Also appointed was a threemember committee of inspection to work with the liquidators.

Fraser Guthrie, who with his father, Des Guthrie, was a shareholder in Guthrie Securities, told the meeting Guthrie Securities was an associate company of Guthrie Financial Corporation. However, there was no legal link between the two companies, Mr Guthrie said.

He said Guthrie Financial Corporation had had dwindling client funds and therefore falling revenue over the past year. That led directors to determine Guthrie Finan-

cial Corporation was technically insolvent and decide to ask for the debenture holder. The New Zealand Guardian Trust Co, to appoint receivers.

Guthrie Securities could thus not trade and asked for a liquidator to be appointed. It did not have a debenture holder, so receivers were not appointed. Many of the creditors, holders of bullion certificates, asked Mr Guthrie where their bullion was deposited. They pointed out the certificates said the bullion was being held by Guthrie Securities on their behalf.

Mr Guthrie said creditors had to understand the bullion operation was conducted like a bank.

He said the company kept a daily metal float which had proved in the past to be enough to cover day-to-day requests for bullion, or for it to be sold for cash. Many people had done just that since 1979 when the company began trading bullion. Just as a bank would not have enough funds if all depositors asked for their money at once, Guthrie Securities would not have suffi-

cient bullion if all certificateholders asked for their bullion simultaneously, Mr Guthrie said.

One questioning certificateholder said he had a certificate for nine kilograms of gold. Mr C. R. Darlow, an Auckland solicitor presiding at the meeting, stopped the questioning after about 50 minutes.

Mr Guthrie told creditors that his net worth at the end of the liquidation would be zero. His father faced a similar situation. “You will get the lot.”

Mr Chilcott, after his appointment, warned creditors that the process of liquidation and any repayment would take a long time. He said many complex questions had to be addressed. If litigation was involved the process might be even slower. Mr Chilcott, in reply to a question, said his hourly rate for liquidation work was $lBO. Any fees must be approved by the committee of inspection. He said he had no professional or personal relationship with Guthrie Securities or its executives.