AFFAIRS OF COMPANIES.

New Zealand Herald, Volume LIX, Issue 18225, 19 October 1922, Page 8

AFFAIRS OF COMPANIES.

" EMBARRASSED " FINANCES. IMPORTANT AMENDMENT. PREVENTING "LIQUIDATION. [BX TEaioBAPK.—SPECIAL REPORTER.] WELLINGTON. Wednesday. The Companies Amendment Bill is a measure of one operative.clause. It provides that if it appears to the Court that any company i/ financially embarrassed and that it would be''contrary to the interests of the creditors of the company as a whole or of any class of creditors, or contrary to the public interest, that the company should be wound up, the Court On the application of the company or of my creditor or shareholder or of its own motion may direct a meeting to bo held of the creditors of the company, or any class of creditors, for the purpose of considering the expediency of making some arrangement or compromise with the company. The meeting is to be held as directed by the Court, which may select a chairman, give directions ail to procedure, and decide any other matter affeating the convening and conduct of the meeting. If any arrangement or compromise is agreed to by a majority in number representing three-fourttiß in value of the creditors present, in person or by proxy, the Court may order that such arrangement or compromise shall be binding upon tho whole of the creditors of the company or the whole 'of the class of creditors entitled to attend the meeting, and the arrangement or compromise shall take effect accordingly. An application to the Court to make use of ihese powers may be by petition or, if proceedings have "been commenced for the winding-up of 'ho company, by motion in such proceedings. The Bill is a measure of more importance than appears on the face of it. The Hon. E. P. Lee, in introducing tho measure, said the necessity for it was a matter that the Prime Minister would explain to the House later, A similar provision, ho added, had be-m in operation for a time in New South Wales. Recently in the House the Prime Minister hinted that there were two or three large companies in the Dominion that might have to go into liquidation. Mr. Massey added that these companies were outside the cities. It i* quite freely stated that tfcese companies are co-opera-tive concerns. Some financial authorities have expressed the opinion that it might be necessary for the Government to come to tho assistance of these concerns. Others equally skilled in matters of finance express a contrary opinion, at least in so far as companies that may be insolvent are concerned. They state that the Government could not possibly be expected to carry these or; for an indefinite period of years. It is not as if they were national concerns, such as the Bank of New Zealand at the time when it was saved from disaster by the Government of the dav. The Bill introduced to-day may be the means of re-establishing these companies on. a sound footing.