FIRM'S AFFAIRS

New Zealand Herald, Volume LXXI, Issue 21906, 15 September 1934, Page 14

FIRM'S AFFAIRS

ORDER FOR WINDING-UP OSWALD M. SMITH COMPANY PETITION BY CREDITORS UNSECURED DEBTS OF £15,000 [by telegraph —OWN correspondent] DUNEDIN. Friday An order that the firm of Oswald M. Smith and Company, Limited, should be wound up was made by Mr. Justice Kennedy in the Supreme Court to-dav. The petitioners were Aulsebrook and Company, Limited, Cadbury-Fry-Hud-son, Limited, McLeod Brothers, Limited, Dunedin Brewery and Malt Extract Company, Limited, and the Taieri and Peninsula Milk Supply Company, Limited. When the ease was called Mr. F. B. Adams said that papers served on the company had come into his hands. He was therefore appearing on behalf of the company. Having no authority he wished to say that he did not oppose the order asked for and the only point on which he wished to make any suggestion was that of costs. If an order f6r costs was sought he thought it nnght be better to reserve the question in order to ascertain whether the proceedings were necessary or served any useful purpose. Attitude of Directors His reason for referring to this aspect of the case was that the affidavits showed that the directors of the company were themselves prepared to put the company into liquidation, continued Mr. Adams. Had this course been followed it would have been possible to have, the company in liquidation at an earlier date. So far as he was aware a voluntary winding up would perve every purpose under the new Companies Act, and he was not awaie that there was any distinction between one class of winding up and another. Mr. Adams added that it was clear that it was intended that certain directors should be* examined. Obviously an attack would be made on the directors. If an attack were made it was possible that the costs of the present proceedings might come out of the pockets of his clients. Mr. A. C. Stephens, who appeared for the petitioners, said that as there was no opposition to the application he took it that the petitioners merelv had to satisfy the Court that the preliminary conditions had been carried out and that a good case for winding up had been made cut. The proceedings had been brought under the Companies Act, which provided that a company might be wound up by the Court if it was unable to pay. its debts. The first point on which the petitioners relied was that the company had failed to pay debts to tho petitioners amounting to £6485. The second was that it had given a debenture to the Bank of New Zealand, which had appointed a receiver aud had taken possession of the company's assets. It was stated that tho bank would not be paid in full. Reasons for Petitioners' Action The directors had expressed willingness to go into voluntary liquidation, but that course was not acceptable to the creditors, counsel added. Debts owing to unsecured creditors were £15,500 and there were no assets to meet them. All the unsecured creditors approved of the proceedings. Mr. Adams: That is too wide. I am one myself and 1 don't approve at all. Mr. Stephens suggested that the amount owing to Mr. Adams was so small in comparison with the total of £15,500 that it had been overlooked. He added that the creditors had formed a fund to meet the expenses of the proceedings. They knew that there were no assets to meet the cost, but thev felt it necessary in the interests of commercial morality that steps should be taken. That was one reason why this particular form of winding up had been asked for. He did not propose to ask for an order for costs. He did not see any hope of getting them. His Honor stated that the petitioners were entitled to the order sought. He directed that the company should be wound up by the Court.