THE WHOLESALE CLUB.

Star (Christchurch), Issue 10175, 9 June 1911, Page 3

THE WHOLESALE CLUB.

tPETITION" FOR WINDING UP. TO BE HEARD OX AUGUST 7.

In Chambers this morning Mr Justice Denniston heard a motion for an order directing the date on which apetition for the winding up of the Wholesale Club, Limited, should be heard, and made an order fixing the hearing-for Monday, August 7, at 10.HO a.m. Directions were also given for advertising the petition. The petition, which i.s a lengthy documents, sets out that the company is indebted to Tayler and Co. for £l(->9. £sl being for goods supplied, and £ll7 1.2s lid on a dishonoured promissory note: to the Christchureh "Press" Co. tor £279 Os fid: to Lucas Broa., £64 7 s 3d : to J. M. Hey wood and Co., £239 12s 101, for cash advanced and services rendered : to the Christchureh Gas Co.. £l2l 10s. for gas ami goods; to Walter Ingle. £7OO, on a dishonoured promissory note. The petition goes on to say that the company had iailed to pay anv part ot these debts: and that on May 4 last a return ot nulla bona " was niada in the Magistrate's Court, Christchurch. to a distress warrant issued by the " Press" Company against the company. The petitioners allege that on April 20 the company issued -debentures secured by the assets of the company for £3OOO, and on May 1 the debenture-holders entoi,?d into possession of the assets of the company, and were now in possession and selling the assets of the company. There were unsatisfied judgments in the Magistrate's Court at Christchureh, and execution might be levied on the surplus assets in the hands of the receiver on behalf of the debenture-holders. The petition state.' further that the company was formed mainly for the purpose of acquiring the business of a company of practically the same name in Christchureh, and in order to Attract, capital for the purpose had issued a prospectus. No balance-sheet or statement of assets and liabilities of Ihp concern or business agreed to be taken over had ever produced, and it was believed that no such balance-sheet- had at any time been made up. The operations of the old company were small, and it had only been started or running a lew months before the issue of the prospectus. So far as could be ascertained only £2211 or thereabouts in cash or its equivalent, had been contributed to or provided for the old company. So far as investigations had been made they tended to show that at the time of the issue of the prospectus. and at the time of the company's starting and taking over the old company and its business and assets and liabilities the business of the old company was then quite involved, and the assets, if then realised, would not have provided sufficient to pay 20s in the £ on its debts and liabilities. So Jar from the business of the old company and the goodwill thereof having any value, its business and goodwill wore practically valueless. The petitioners had never been able to ascertain the true position of the old company. The subscription of 5000 shares, which was fixed as the minimum upon which the directors might proceed to allotment, was much too small to provide sufficient capital to enable the company to start business on. and they should have known that it was practically impossible for the company to have any chance of success with such inadequate capital. The petitioners further allege, that- the promoters and directors of the company in their extensive advertisements in the daily newspapers had led the petitioners and the public to believe that the business of the company was developed to such an extent as to show that it was financially profitable when the directors and promoters ought to have known that such was not the case. The petitioners, or some of them, had been induced to do business with the company on the truth of the prospectus, advertisements and allegations of the promoters and directors. The directors and promoters of the company received applications for shares and moneys from applicants for shares and allotted shares up to the dav when the debenture-holders took possession of the assets of the company. The petitioners represented that the affairs of the company should be thoroughly and exhaustively investigated, in order that the, fjcts and circumstances under which the company was floated and carried on might be exactly and accurately ascertained, and the liabilities of the promoters and directors effectively adjusted. Tt is also alleged that the promoters and directors shortly after registration of the company borrowed money at high and exorbitant rates of interest for the purpose of enabling the company to carry on business, and for a loan of £ISOO agreed to pay £3OO for only a very short, period of time. The petitioners submitthat it is just and. equitable that the company should l>e wound up, and pray for an order as follows : " That the New Zealand Wholesale Club, Ltd., may be wound up by the Court under the provisions of the Companies Act, 1908."