NEW ZEALAND BUTTER

Otago Daily Times, Issue 23500, 14 May 1938, Page 16

NEW ZEALAND BUTTER

COMPANY’S LIQUIDATION VACUUM-PACKED PRODUCE (From Our Own Correspondent) (By Air Mail) LONDON, Apl. 23. Resolutions for the voluntary wind-ing-up of Vacuum-Packed Produce. Ltd., a company selling New Zealand butter in England, and the appointment of a liquidator, were passed at meetings of shareholders and creditors in London this week. A petition has been lodged by a loan creditor, however, for compulsory winding-up. In • a statement of the position. Lieutenant-colonel E. ff W. Lascelles, chairman of the company, which sells New Zealand butter under the brand Vac-Pac, said that since the last annual meeting the turnover had materially increased. The company had also secured contracts for the supply of New Zealand cream,* a development which the directors considered would be remunerative. Contracts had been made and business conducted with Continental firms for the sale of canned produce. Trade generally had improved through trie sale of additional products and the expansion of existing lines. Favourable reports had been received about butter shipped abroad, and an unsolicited testimonial in highly favourable terms had been received from the War Office. LACK OF WORKING CAPITAL The company had very little working capital at the time of the last balance sheet other than that provided by loan creditors, and as overhead exEenses exceeded earnings the directors ad been obliged to seek further funds. He described loans made and stated that on several occasions hegotiations for securing sufficient funds to consolidate . temporary borrowing had failed only at the last moment. International and political uncertainties had reacted unfavourably. A loan creditor intended to _ apply to the court for compulsory liquidation, and in view of this the directors considered it advisable to submit a resolution for voluntary winding-up, as in their view the assets could be thus realised to better advantage. A statement of affairs drawn up by a chartered accountant showed that there was a deficiency of over £3OOO as regards creditors, which explained why the board was unable to make the statutory / declaration necessary for a member’s winding-up. DEFICIENCY OF £3453 The statement showed liabilities to unsecured creditors at March 31 were £13,895, comprising £10,568 trade and expenses and £3327 directors’ fees; to partly secured creditors, £9833, less securities valued at £8516, leaving £1317 to rank for dividend; and distrained rent, £122, Assets totalled £ll,Bßl, the largest items being 69,000 shares of 10s each in a subsidiary company, estimated to be worth £6900; book debts, £3000; and stock, £l4lß. The estimated deficiency was thus £3453, subject to the cost of liquidation. There were contingent liabilities in respect bf forward contracts, discounted bills, rent and service agreements. A deficiency account showed losses incurred between September, 1934. and January, 1936, were £8083; between February, 1936, and January. 1937, £8168; and between February. 1937. and March 31. 1938, £7370. Dealing with the latter figure. Colonel Lascelles said the directors considered that in recent months thu loss had been nominal on the basis of a reduced salary being paid to the managing director and no fees to tno directors. It was’ hoped that a new company might be formed to acquire certain of the assets of the company, in which event the directors would use their best endeavours to secure for shareholders the opportunity of subscribing for shares. He was permitted to say that in the event of voluntary liquidation, the High Commissioner, Mr W. J. Jordan, had undertaken to render tho liquidator any assistance he could properly give, a gesture which might be of material assistance in maintaining goodwill and the extensive rang® of trading contacts which had been built up. CREDITOR’S DISSENT Resolutions in similar terms wero passed at meetings of shareholders and creditors for voluntary winding-up -and the appointment of Mr R. E. Yeabsley, a partner in Hill, Vellacott, and Co., chartered accountants, as liquidator. Dissent was expressed by Mr Guy Durnford. on behalf of Mr G. French, a loan creditor, who said bis client’s petition for compulsory liquidation had been lodged. Mr French did not want to act in a hostile manner, but considered his own liquidator should act in conjunction with the one proposed, or that an Independent liquidator should be appointed.' He also felt some anxiety over the clearly-foreshadowed desire to reconstruct the company. If an independent liquidator was appointed, his client was prepared to let his petition be adjourned when it came before the court. A proposal was made by the directors that Mr French should act on a committee of inspection to assist thn liquidator, but he declined to accept tho suggestion. Mr Durnford asked if the directors were prepared to forgo outstanding f66s» Colonel Lascelles said a difficulty arose in that a number of directors to whom money was owing were not now connected with the company. It would be more feasible when the future position was clarified to approach all concerned and seek co-operation. Mr Durnford later expressed hit client’s intention to proceed with the petition for compulsory winding-up.