REGENT STREET LTD.

Star (Christchurch), Volume XLIV, Issue 708, 8 March 1933, Page 8

REGENT STREET LTD.

Petition to Have Company Wound Up. CONDITIONAL ORDER MADE. A petition filed by a judgment creditor to have Regent Street, Ltd., wound up, was heard in the Supreme Court to-day before Mr Justice MacGregor. His Honor made an order, but agreed to leave it open for fourteen days. If, during that period, the creditor is paid the sum of £450 13s 9d, together with costs, the order will not be sealed. If that condition is not complied with, the order will be sealed and will come into operation. Mr K. M. Gresson represented the judgment creditor (Mrs J. D. Shaw, of Wellington) in support of the petition. Mr Stacey appeared for the debtor to oppose the petition, and Mr Cottrell for the Government Life Insurance Department, the first mortgagee.

Mr Gresson based his case on three points. First, the attitude of the first mortgagee, the secured creditor; secondly, the fact that the assets were covered by debentures and the receiver was in possession; thirdly, the alleged unwillingness of the unsecured creditors to consent to a compulsory order. The fact that the assets were covered by debentures was the strongest reason for the winding up of the company. Although, if the company were wound up, the creditors did not stand to gain anything, counsel submitted that it would enable an investigation to be made concerning the formation of the company and as to where all the money had gone. It was desirable in the public interests that a company which had ceased to function should be wound up. There was no appearance of the creditors to oppose the petition. Creditors’ Meetings.

In an affidavit filed by the company’s secretary it was stated that the creditors wished the company to carry on, believing that it could do so satisfactory* in due course. That, said counsel, was an odd expression to be put forward by the company’s secretary. The affidavit which was only filed on Monday, was the first hint he had received of any opposition.

Mr Stacej* said that evidence would be given that the assets were greater in value than the debts. The total debt due to secured and unsecured creditors was £78,000, of which £41,220 represented first mortgage, £5113 second mortgage, £13,550 debentures, and £17,838 due to unsecured creditors. The value placed on the premises to-day by two valuators was £84,000 and £87,000.

On February 17, a meeting attended by seventeen creditors, consented to oppose the petition. There was an attendance of only five creditors at a meeting on February 25, but it was decided to support the decision of the previous meeting.

His Honor said that proceedings were started in December, but the affidavit had been filed only two days ago. Mr Stacey submitted that although the company was insolvent now, if given an opportunity it would be able to pay its debts. His Honor: It is insolvent trading, is it not?

Mr Stacey: If the company is wound up it will not be able to pay am*thing. The present revenue from the shops is £2l per week. I ask the Court to direct that a meeting of unsecured creditors should be held. Ilis Honor: Why wa's it not held before ? Mr Stacey: There was a meeting, although not a correct one. There may have been delay on the part of the officers of the company, but it should not prejudice the company’s assets. Liquidation Opposed.

Mr Cottrell said that the Government Life Insurance Department had been receiving a certain amount of money in reduction of interest. The department felt that if the company were forced into liquidation it would be damaging to the assets. Owing to economic conditions ‘the value of the street had depreciated, but there was no reason to believe that the buildings would not become valuable. The Government Insurance Commissioner was satisfied that the best efforts were being made, by the company. His Honor: What is the position of the company?—Very uncertain. His Honor: Is it solvent or insolvent ? —That depends on what the assets are. His Honor: It can’t pay full interest on the first mortgage. That is evidence of insolvency. Mr Gresson said that to-day was the first he had heard of a meeting of creditors. His Honor’s Comment. His Honor said that the petition had been filed by a judgment creditor, Mrs J. D. Shaw. Of £489 owing to her she had been able to obtain only £39. No notice of the’ meetings held was sent to the petitioning creditor or her solicitor. Not one creditor had appeared in Court and* all that was heard of opposition to the petition was an exparte statement made by the secretary. That statement omitted reference to the meetings held. It seemed to be futile. If the creditors said what had been mentioned in the affidavit they ought to have come to Court to oppose the petition. His Honor said that the question of directing that a meeting of creditors should be called was out of the question now. ‘There had been two meetings and there was evidence that they : had not been properly conducted. The fact should not be forgotten. The lady was a judgment creditor and all she had been able to get out of the company was £39. In these circumstances he would make an order for winding up the company. On the application of Mr Stacey, his Honor agreed to leave 'the order un'sealed for fourteen days, conditional upon the petitioning creditor being paid.