YADIL PRESS, LIMITED.

New Zealand Herald, Volume LXII, Issue 18947, 19 February 1925, Page 10

YADIL PRESS, LIMITED.

A LIQUIDATOR APPOINTED, NOTHING FOR SHAREHOLDERS. RECENT NEWSPAPER ATTACKS. Meetings of creditors and shareholders of Yadil Press, Ltd., were held at the Board of Trade offices, in London, recently, when the official receiver, Mr. J. D. Pepys, was appointed liquidator of the comf pany. Mr. Pepys presided, and, in explaining the position, said the company was registered as a private company 011 June 4, 1923, in the name of the Quality Press, Ltd., with £BSOO capital. In the first place it was formed to supply Clement and Johnson, Ltd., the proprietors of " Yadil," with circulars, labels, direction slips, and so on. From time to time the original capital was increased until it amounted to £250,000 nominal, consisting of 1,000,000 cumulative preference shares of 4s each, and 1,000,000 ordinary shares of Is each, the issued capital being £20,333. . In order, to cope with the rapidly-grow-ing business of Clement and Johnson, Ltd., the business of the Quality Press was taken over entirely last. Juno with 'the title of Yadil Press, Ltd., the latter company acquiring the right for a period of 20 years from July 1, 1924, to supply Clement and Johnson with labels, etc., and, in addition, to place through their agency all the publicity in newspapers, posters, and omnibus advertisements of that company. On June 26, 1924, the company issued a prospectus for a further subscription of preference shares, but the prospectus met with a very poor response, though it contained very optimistic estimates of the profits to accrue to the company. The directors claimed that their estimates were justified by the fact that the sales of " Yadil " had gone up from £ISOO a month in the early part of 1923 to £30,000 a month in June, 1924. But had it been stated that the paid-up capital of Clement and Johnson was £6lO only, and that Clement and Johnson were owing them £17,000, and that Clement and Johnson had debentures outstanding to the amount of £58,800, it was quite possible that many of the shareholders would not have applied for their shares Liabilities mid Assets. Then on July 22, 1924, came the attack on the proprietors of " Yadil " by a London daily newspaper. The result of that attack was the cessation of the business of Clement and Johnson, and, consequently, the cessation of the business of that company. Tho books and accounts of the company were properly written up, and were a fair record of the company's business. The statement of affairs disclosed the existence of 83 unsecured creditors to the amount of £1997, and all of that, with the exception of about £IBO, was in respect of ordinary trading debts. There were other liabilities not expected to rank that amounted to £IB4O. So fatas assets were concerned stock-in-trade represented £llO, machinery had realised £I2OO, and there were good book debts of £66, doubtful book debts of £54, and bad book debts of £19,412, tho last-named sum being the debt of Clement and Johnson, Limited. After meeting the claims of preferential creditors there was about £IOOO available to meet £2OOO, the amount of the unsecured creditors. Therefore the creditors would get about 10s in the £, and there could not possibly be anything for the shareholders of the company. It was possible that a claim for misfeasance might be made against those directors' of the company who were also directors of Clement and Johnson in connection with the transactions between the two companies, but that was a matter which would have to be very carefully considered by the liquidator. Question of Proceedings. Mr. Oswald Earp said the failure of that company was due entirely to causes outside the management, and he could advance what he regarded as solid reasons for thinking that, though the claim for damages against tho people who attacked the proprietors of " Yi.dil " might not be feasible at the moment, it would become feasible in the future. Mr. Pepys: I understand you to say there may be an asset if certain actions for damages are brought against the persons who attacked " Yadil." Has any action yet been commenced by tho proprietors of " Yadil" against thoso persons ? Mr. Earp: This affair fell out all of a sudden last July, and all that big business fell. The business has not ceased, but is going on very slowly. The proprietors entered an action. Prompt measures which should have been taken were not taken to reassure the public. Six days elapsed before anything was published, and by that time the public had made up their rnirid. Mr. Pepys: But what is the position of the action ? Mr. Earp: At a later stage it was given as the opinion of two eminent counsel that the* action could not be proper.lv fought unless the secret process was disclosed. In addition to that the estimate was given that the costs of the action would approach £50,000, and in these circumstances it was felt desirable to discontinue the proceedings, and they are discontinued. _Mr. Vaughan, solicitor of the company: No, they are not, and I know nothing about the estimate of £50,000. After some further discussion, the proceedings closed.