COMPANY’S TROUBLES

Taranaki Daily News, 23 May 1934, Page 10

COMPANY’S TROUBLES

COMPULSORY WINDING-UP. S.O.S. MOTORS LIMITED. Wanganui, May 19. A compulsory winding-up of S.O.S. Motors Limited, a road service concern operating between Wellington and Wanganui, was ordered by the Chief Justice, Sir Michael' Myers, in the Wanganui Supreme Court this morning. Under the Companies Act, the Texas Oil Company (Australia), Ltd., petitioned to have the company wound up. At present the company’s affairs are in the hands of a receiver, Frank Gattley, who appeared to oppose the petition. Mr. L. M. Abraham appeared for Gattley and Mr. F. K.Turnbull for the Texas Company. “It is said that practically all the other creditors, both secured and unsecured, though they have not appeared, have intimated to the company or the receiver for the debenture-holders, that they do not desire a winding-up order raaae, said his Honour in his judgment. Ido not think that, in all the circumstances of the case> a great deal of weight can be attached to this attitude of . the creditors. So far as the secured creditors are con-cerned-other than the debenture-holders —the result of the petition, so far as I can see, is of no moment one way or the other. So far as the unsecured creditors are concerned their sole reason is not that they prefer some other method of realisation as being more likely to bear some fruitful result to the unsecured creditors, but they do not see any prospect of a dividend. “In so far as the two unsecured creditors are concerned—those two of the largest—l am not satisfied that they are entirely disinterested, inasmuch as they have been, and are doing, business with the receiver in the course of his carrying on the business on a cash basis. Some regard should be paid to the reasons which the opposing creditors adduce for the conclusion at which they have arrived, and if the ground of the unsecured creditors for not wishing a winding-up order were that they were ultimately to secure a greater benefit m respect to their claims against the company by leaving the receiver to carry on in the meantime and eventually dispose of the assets, their wishes would be entitled to receive a good deal of consideration. That, however, is not their C3 “lf an order is made, it will turn out eventually that there is nothing for the unsecured creditors. The carrying.on of the company’s business from its inception has been of a somewhat unusual character, and since early in 1931, if not before, the company has been insolvent. The receiver says that he has been endeavouring to dispose of the company’s undertaking and has been unable to do so. However, that may be, but I do not think that the existing course of Business should he allowed to continue indefinitely, and a winding-up is the only means of bringing the company to an end. Apparently the only possible purchasers of the company are the debenture-holders themselves. . The debenture-holders obviously had it in their power to bring about a voluntary liquidation if they wished, and they have not thought fit to do so. It "was apparently thought that a winding-up might jeopardise the debenture-holders’ security, in that the benefit of the transport license held by the company under the Transport Licensing Act, 1931, and its amendments, might be forfeited or lost.” His Honour held that the property rights of the company would not be forfeited by a winding-up order.