General

Workplace investigations can detect the source of lost funds, identify employee misconduct and possible culprits, as well as help recover losses.  They are usually undertaken when there is alleged employee misconduct, or a rumor of something amiss comes to the attention of the employer which requires action. Investigations must be undertaken in a fair and reasonable manner without bias. Investigations into employee misconduct can cause significant problems.  They can also be expensive, time-consuming and disruptive to organisational morale.  Investigations which are not conducted in an ethical and transparent manner, with the utmost care and confidentiality, can lead to a number of legal issues and other unexpected complications.  Well-done workplace investigations can provide a solid defence to legal challenges raised by…
Last week's Supreme Court judgement on Jennings Roadfreight Limited (In Liquidation) has overruled an earlier Court of Appeal ruling and provided clarification on a legal grey area. The Supreme Court has decided in a unanimous decision that amounts due to the IRD rank behind liquidators, employees and Kiwisaver entitlements' to funds in a bank account at the commencement of a company liquidation. The history and details of the case are as follows.  JENNINGS ROADFREIGHT LIMITED (IN LIQUIDATION) and BORIS VAN DELDEN and PERI MICAELA FINNIGAN AS LIQUIDATORS OF JENNINGS ROADFREIGHT LIMITED (IN LIQUIDATION) v COMMISSIONER OF INLAND REVENUE Jennings Roadfreight Limited (Jennings) was placed into liquidation on 24 March 2011. Its liquidators are Boris van Delden and Peri Finnigan of…
It is an unfortunate fact that many companies experience financial difficulties at times. Often the directors/shareholders do not realise that there are a number of options available to them. This article provides an overview of the various options for distressed companies. Creditors compromise A compromise is an agreement between a company and its creditors. The purpose is to enable a company to trade out of its financial difficulties and thus avoid administration, receivership or liquidation. In this way the company can survive into the future and provide continuing business to creditors. There are two basic features of most compromises: Creditors will be repaid in full or in part over a period. If creditors are paid in part they write off…
The Insolvency Act 2006 was implemented on 3 September 2006, and created a new alternative to bankruptcy called the No Asset Procedure ("NAP").  This involves a one year term, rather than the usual three year term in bankruptcy.   The NAP is simply a once-off reprieve for the consumer type small-time debtor who has got out of their financial depth.  To qualify, the debtor must have no assets (except excluded assets - see below), total debts between $1,000 and $40,000, no means to repay any amount, and a clean financial record (not previously bankrupt and not previously admitted to the NAP).   Once admitted to the NAP, the debtor enjoys a moratorium on their debts; with some exceptions these cannot…
Our first article of the year reviews the significant issues and developments in insolvency from 2012 and looks at their impact on the industry into 2013 and beyond. Insolvency practitioner licensing has not yet been adopted  Legislation has been drafted however the approach and extent to a licensing regime seems to be difficult to agree and has generated much discussion within what is a relatively small industry. In late 2012 INSOL (the NZICA administered insolvency special interest group) proposed a voluntary registration regime, in an effort to provide all parties with more confidence when choosing and dealing with insolvency practitioners ("IPs"). IPs regularly hold significant funds for creditors, with minimal oversight.  The recent conviction of a liquidator for theft of…
Seventh Schedule DISCLAIMERThis article is intended to provide general information and should not be construed as legal advice.  Parties who require clarification on issues raised in this article should take their own legal advice.
A statutory demand is a claim under Section 289 of the Companies Act 1993. If you or a client receive a statutory demand you are required to pay the specified sum, enter into a compromise or give charge over property to secure payment of the debt to the reasonable satisfaction of the creditor within 15 working days of the date of service, or such longer period as the Court may order. Received a Statutory Demand? We can help If you have been served with a statutory demand you need to speak to us immediately. There is a 15 working day window before your options start to close. The earlier you contact us the more options you have. Contact us now…
The earthquakes in Canterbury created a disaster on a scale not previously seen in New Zealand during our lifetime. Christchurch will be rebuilt and when it gets into full swing it will be the biggest building project in New Zealand history. Treasury has forecast that the cost of the rebuild will be circa NZ$40 billion. Fortunes will be made out of the rebuild, but like any boom, history tells us there will be some spectacular failures along the way. In this article we will explore the issues facing construction companies waiting for the Christchurch rebuild, the chances of another large construction company collapse and some advice on how you as a professional advisor or construction industry contractor can help protect…
Record numbers of New Zealanders continue to leave permanently for Australia, almost 54,000 in 2012 alone. While most of those departing leave in search of higher incomes and warmer weather, some leave to escape their financial responsibilities, whether this is child support, a student loan or a liability under a personal guarantee. Correspondingly, often there are no assets left in New Zealand for the creditor to recover. So, is it really as simple as purchasing a plane ticket to Australia to walk away from debts? This common tactic has become such a concern for the Inland Revenue Department, who administers the student loan scheme, that new sanctions allowing the arrest of overseas based defaulters at the border were announced in…
McDonald Vague has moved offices. Our new address is: Level 10, 52 Swanson St Central Auckland The new offices are located next to the recently refurbished St Patrick's Square. There are a number of parking options available - either on street - pay and display, at Wilson Parking on Swanson Street or at the Farmers Carpark on Hobson Street. Please note our phone numbers and postal address have remained the same. We look forward to seeing you there! DISCLAIMER This article is intended to provide general information and should not be construed as advice of any kind. Parties who require clarification on issues raised in this article should take their own advice.
This month we conclude our discussion of the rights of unsecured creditors in various insolvency proceedings, by looking at the position in a liquidation. IntroductionA liquidator is normally appointed either by the shareholders or the High Court. The shareholders choose their own liquidator. The High Court appoints a liquidator chosen by the applicant creditor. More unusually, a liquidator can also be appointed by creditors at the 'watershed meeting' in a voluntary administration - seePart 1of this article. A liquidator has a duty to take possession of, protect, realise, and distribute the proceeds of realisation of the company's assets to its creditors. He or she looks after the interests of all creditors. The plight of the unsecured creditorUnsecured creditors do not…
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