CREDITORS' MEETING

Otago Daily Times, Issue 26853, 18 August 1948, Page 7

CREDITORS' MEETING

NELSON TOBACCO COMPANY VOLUNTARY WINDING-UP After a recent decision by the shareholders of the Nelson Tobacco Company, Ltd., that, because of its liabilities, the company could not continue in business and that it should be wound up voluntarily, a meeting of creditors of the company was held, and Mr G. P. Leighs, accountant, was appointed liquidator and a committee ,of inspection was set up. The chairman, Mr E. R. Neale, M.P.. said that these steps would automatically result in a complete investigation of the company’s affairs. A similar decision to wind up voluntarily was made by the shareholders of the Hillsborough Investment Company, with the affairs of which the Nelson Tobacco Company was inextricably tied up.

A statement of the affairs of the company as at the end of July was presented by the directors. This disclosed total liabilities of £52,720. The Commercial Bank of Australia was shown as holding debentures for £24,017, and the Dominion Life Assurance Office was a secured creditor for £4300. Wages owing, £568, were listed as a preferential claim. The open accounts ,of unsecured creditors totalled £23,491 and Tobacco Board levies £139.

The company’s assets, estimated to have a book value of £84,242, were put at £64,197 if the business was carried on. After redeeming debentures and meeting preferential claims, this would leave sufficient to satisfy unsecured creditors and a surplus of £ 11,477 to be returned to shareholders . If there was a forced sale, however, it was considered that the value of the assets would be only £37,512, and there would be a deficiency of £12,815 on creditors.

The chief assets were shown as stock in trade (book value £36,695), endowment insurance funds (£1038), plant and machinery (£8587). advances secured and unsecured (Hillsborough Investment Company £13,163. sundry £11,271), consignment stock (£2795), brokerage and other costs re new capital (£1547).

The Income Tax Department was shown as a creditor to the extent of £2824, and another tax claim was £792 by the Social Security Tax Department'. Altogether, 114 trade creditors were listed. Their claims ranged from thousands of pounds down to a few shillings, and totalled £14,123. The biggest creditors* listed were the Nelson Freezing Company, Ltd., £3114, and B. J. Ball and Co.. Ltd., of Auckland, £2671. A number of Nelson creditors claimed sums running well into three figures. Twenty-seven Nelson tobacco growers were shown as being in credit with the company for sums of up to £772 and totalling £4473. During the discussion, the former managing director, Mr W. R. Olllver, was closely examined by Mr P. S. Boyes. a member of the committee of inspection, particularly in regard to unsecured advances made by the company to Hillsborough Investment Co. Mr Boyes, who was a member of the creditors' committee which made a preliminary investigation of the company’s affairs, remarked that the committee had been set up to protect the assets, but the inquiry had revealed few assets to protect. In the course of further comment, Mr Boyes said. ‘‘The creditors will be very lucky if they get anything out of the liquidation ”