By McDonald Vague

  • A case of "Vintage" wine

    Matakana was a winemaker. It had a related company, Goldridge, whose role was to market the wine. The Vintage companies ("Vintage") were set up to raise money from outside lenders and to hold that money to be paid when invoiced for the cost of the grape juice and for bottling the wine, and then supply the bottled wine to Goldridge. The use of the funds from Vintage's secured creditor was supposed to be monitored by an independent accountant. That accountant was supposed to be a cheque signatory and control the flow of funds according to the terms of the loan agreement.


    Read Full Article

  • Legal decision good news for employees and IRD, bad news for secured creditors

    In August 2011, the High Court issued an important decision in Burns v Commissioner of Inland Revenue on the widely argued question of ”what is an account receivable?”. This followed an earlier decision (re Northshore Taverns, 2008) in which the High Court decided that “accounts receivable” amounted to ”book debts” only.


    Read Full Article

  • An alternative to bankruptcy - Part 5 proposals

    When a person is faced with a bleak financial situation, bankruptcy may appear to be the only outcome. However, there are certain circumstances where this may not have to be the case. Part 5 of the Insolvency Act 2006 provides for alternatives for individuals facing bankruptcy – and the Subpart 2 proposal option can be very beneficial to affected parties.


    Read Full Article

  • Personal insolvency - Part 5 proposals

    A Part 5 Subpart 2 proposal under the Insolvency Act 2006 gives a debtor an alternative to bankruptcy. If the proposal succeeds, then the insolvent is bound by the proposal and does not have to comply with the usual provisions of a bankruptcy. For example, the debtor may carry on in business and have more than one bank account, and is not prevented from leaving the country.


    Read Full Article

  • Re-Insurance Difficulties Post Earthquakes

    The recent catastrophes around the world have had a dramatic effect on the New Zealand insurance industry and the ability to obtain insurance. In particular the Christchurch earthquakes have made it more difficult and costly to obtain insurance cover for some of the properties and goods we need to secure. We asked Geoff Blampied, CEO, Aon New Zealand to provide some comments and advice on the subject. Geoff writes:


    Read Full Article

  • Recent Agri-Business Case Study

    McDonald Vague has been appointed as receivers on a number of major appointments, including the recent receivership appointment of Tawera Land Company Limited “TLC”. This is an entity owning millions of dollars of farmland associated with bankrupt businessman Ken Thurston.


    Read Full Article

  • Voluntary Administration In New Zealand

    Voluntary Administration provides a moratorium period during which the future of a company can be assessed by an independent party. That independent party then makes recommendations to creditors as to whether that company has a future and recommends the form that future should take. In practice, the moratorium period is usually a pathway to liquidation or a compromise (deed of company arrangement).


    Read Full Article

  • Compromises with creditors - worthwhile or not?

    This article discusses when to accept a compromise, suggests what modifications and amendments can be asked for, and when to reject a compromise.


    Read Full Article

  • The Rights Of Creditors When A Company Fails

    When a company fails one of three things happens; The Company is placed into receivership or; The company enters into a compromise with its creditors or; The company is put into liquidation


    Read Full Article

  • The overdrawn shareholder account

    Each year we give advice to the clients of Chartered Accountants. We sit down with those clients, and sometimes their advisors, and analyse the situation. We hear what the company was doing and how it started. We learn the underlying weakness of the company and the event that triggered the visit to our offices. We prepare a draft statement of affairs and help the directors come to a decision as to what course of action they should adopt with their financially distressed company.


    Read Full Article

  • How Liquidators Use Forensic Accounting Skills

    A Chartered Accountant providing business services arrives at results through double entry bookkeeping. That is, for every debit there must be a credit. That same accountant, although they are excellent at their job, may be confused if they are asked to draw conclusions from inadequate records


    Read Full Article

  • Dealing With Liquidators

    A minor, but often emotive issue, is the car "owned" by the director. The director states it is their car, and it is registered in their name. Registration, however, does not prove ownership and if the car is in the company's accounts and shown on the depreciation schedule, the liquidator will fulfil one of their principal duties by taking possession of the car and selling it.


    Read Full Article

  • An alternative to bankruptcy – the No Asset Procedure

    The Insolvency Act 2006 was implemented on 3 December 2006. This Act streamlines personal and provides new alternatives to bankruptcy. The major change relates to a new alternative called the "no asset procedure." This procedure involves a one year term rather than the usual three year term in bankruptcy.


    Read Full Article

  • Directors' Liability When Companies Fail To Pay Debts When Due

    McDonald Vague are solution providers for businesses at risk and specialists in business recovery. We deal often with liquidations of companies where the director has continued to trade an insolvent company. In many of those cases, prior to liquidation, the director/shareholder has increased the mortgage on his house and advanced further capital for a short term cashflow fix without taking out any security for that advance. If funds are advanced to the company, the director/shareholder should seek legal advice on obtaining security and registering that security on the Personal Property Securities Register prior to the advance.


    Read Full Article

  • Establishing Insolvency

    Many businesses are facing hard times in the current market. Your business might be one of them. Early action is critical in determining whether your business can be rescued or not.


    Read Full Article

  • Solvent Liquidations

    McDonald Vague provides a specialist service conducting solvent liquidations. Companies are often put into liquidation this way when a business has been either sold, closed down or reorganised for tax and/or management purposes.


    Read Full Article

  • The Personal Property Securities Act 1999 – pitfalls for creditors

    The Personal Property Securities Act 1999 ("PPSA") came into force on 1 May 2002. It reformed the law relating to security interests in personal property. The PPSA affects lending, leasing and other types of credit-providing activities. Personal property is given a wide definition by the PPSA. With few exceptions it covers any property someone can own, other than land. Non-compliance with the PPSA's registration rules can affect the order of priority of secured creditors and the rights of suppliers of stock and equipment in the event of a liquidation or receivership.


    Read Full Article

  • The importance of registering on the PPSR

    McDonald Vague strongly recommends that businesses register their security interests on the Personal Property Securities Register ("PPSR"), and increase their awareness of the consequences of non-registration. Failure to utilise the PPSR can be a doubly expensive process in the event that their debtor company becomes insolvent.


    Read Full Article