NOTICE TO CREDITORS – UNCLAIMED MONIES - FOURTH AND FIFTH DISTRIBUTION

DML Resources Limited (In Liquidation) was placed into liquidation by order of the High Court at Auckland on 7 May 1998, pursuant to Section 241(2)(c)] of the Companies Act 1993.  The liquidation is in the final stages of being completed.

The funds received over the period of liquidation funded distributions to unsecured creditors.  Most unsecured creditors received 100 cents in the dollar.  Of the five distributions, the liquidators have unclaimed monies from the fourth distribution in June 2013 and the fifth distribution in September 2014.

The Liquidators invite those creditors/employees who believe that they have a claim to these distributions to make contact with us, on 0800 30 30 34,  or the e-mail address shown below, by no later than Friday 15 May 2020 . 

A complete listing of the names of creditors who may have a right to the unclaimed monies can be found below:

Ace Air Conditioning
Aken, T
Alexander, G
Allens United Waikato Ltd
Alley, E
American Express International (NZ) Inc
Ansett Express
Ansett New Zealand
AR & CA Crossley Carrier
Ashby, W M
Auckland City Council
Australasian Diamond Tools Ltd
Autotreads East Tamaki Ltd
Barbarich, Z
Barber, J
Bason, L
Beaurepaires
Benchmark Building Supplies
Berryman, B
Bezar, B H
Blue Star Computer Supplies
Boleyn, B
Bop Line Boring Limited
Brass Fit Engineering Supplies Ltd
Brass, A
Bray P
C Dodson
Cellnet Mobile Services
Charlton, F
Coal Distributors (Auck) Limited
Conner, B
Davie Motors
Dekufdaeh Pty Limited
DHL International NZ Ltd
Dominion Industrial Electrical Supplies Ltd
DSL Group Limtied
Eastman, J
Ebbett Waikato Limited
Edwards, C P
Ellison, G
Endeavour Solutions Ltd
Eutectic New Zealand Limited
Executive Taskforce Limited
Fairview Motors Ltd
Faulkner I
Fenemor, A
Ferg's Panelshop
Firewatch
First Aid Supply Team
Fleet, S
Formerly Fuel Equipment Limited
Fuel Equipment Limited
Geotechnics Ltd - Sales Division
Gibson, D J
Gold Valley Motor Cycles & Marine
Gray P
Grut, R
Hantom, K
Harrison P J
Hauraki Bulk Store
Hema, W
Hennesey, P
Hi-Chem NZ Limited
HK Heaton Limited
Hokapepe, M
Hose Supplies NZ Ltd
Hulmegas LPG Partnership
Huntly East Medical Centre
Huntly Exhaust Services
Huntly Hardware Supplies Ltd
Hurunui, G D
Ian Roebuck Crane Hire Ltd
INVENSYS New Zealand Limited
Iremonger, R L & B E
James Walker NZ Ltd
Jordan, M
Just Water
KGA Geotechnical Limited
Kimberley Tool & Design NZ Ltd
King, J
Knight Equipment
Lamont, A M
Ludowici NZ Limited
Malayan Banking Berhad
Marine & Industrial Limited
Marriner, D
Mason Engineers (NZ) Ltd
McEntee Hire Services Ltd
McKenzie D
Mildenhall, P
Millennum Technology Services Ltd
Mine Design Systems Limited
Mitchell, G
MJG Splicing Service
Moana, W
Mobile Business Solutions Limited
Moore Business Forms
Mott, S
Nationwide Reservations Limited
New Zealand Couriers Ltd
New Zealand Two Way Radio
Nicholson, R
Niederer Drilling Ltd
Nikau, K
North Shore Manpower
NZTS Auckland
Oak Service Station
Oliver, B
One Stop Automotive Limited
Ormsby, M
Owens Road Transport Ltd
Owens Transport Holdings Ltd
Paeroa Hire Centre Limited
Palm Motel
Parkins, E
Parsons, C t/a Buzz a Basket
Patene, H
PC Fixit (Auckland) Limited
Petherick, M
Phoenix International Marketing
Pirtek Counties Limited
Plan & Print Ltd
Projex Limited
Provincial Freightlines Ltd
R E Johnson Ltd
Rentokil Initial Ltd
Roadstar
Ruland, J
S G Baker (Waihi) Ltd
Savage, c
Scott, S
Scrub-It-Clean
Securitas Limited
Sheedy, D
Slater, T
South Auckland Ford
Spot on Fire Extinguisher Service
Stafford-Bush, T & W A
Steel, C P
Stewart, L J
Stoneham, C C
Stowers, C
Summit Hammer Hardware '96
Swart, S & J
T Duffett & Sons Ltd
Tamati, J
Taoho, J
Taparua P
Taupaki, R V
Taylor, W
Te Rapa Electrical & Trading
Telecheck Payment Services Ltd
Telegroup Network Services
Terralink NZ Ltd (In Liquidation)
The Bush Tramway Club Inc
The Christchurch Press Company Limited
The Hydraulic Tool Company Ltd
The Phoenix Printing Co Limited
Titan Cranes Ltd
TK Engineering Ltd
Tobin, B J
Top Gear Motors Limited
Total Maintenance Ltd
Transport Wholesale Limited
Trass, D S
Truck Farms Ltd
Tyco NZ Limited
UBD Ltd
United Environmental Ltd
Valley Bearings & Supplies
VASL Limited
Vector Limited
Virtue, P
W H Limited
Waikato & King Country Press Ltd
Waingaro Quarry Ltd
Welding Engineers NZ Ltd
Weldwell NZ Ltd
Whitcoulls Office Products Limited
Williams, T
Williamson, E A
Winstone Aggregates Ltd
Withers, T
Wrightson
Wynyard, M
 

For email enquiries contact Colin Sanderson at This email address is being protected from spambots. You need JavaScript enabled to view it.

• a six month principal and interest payment holiday for mortgage holders and small and medium sized enterprises (SMEs) businesses whose incomes have been affected by the economic disruption from COVID-19, and 
• a $6.25b Business Finance Guarantee Scheme for SMEs, to protect jobs and support the economy through this unprecedented time.  

• the business was not or stopped being entitled to the Wage Subsidy, 
• the application contained false or misleading information, or 
• the business receives business interruption insurance.  

We are all responding to the various impacts of Covid-19 containment measures over the past days. The Government has ordered wide ranging travel and event restrictions although it is important to note the restrictions apply to people and not goods and services.

NZ is in the early stages of the coronavirus outbreak but many small and medium-sized businesses are already feeling its effects on cashflow to which will be added impending cost increases such as the 1 April increase in the minimum wage.

From the commentary we have seen it is possible that our summer has insulated us from the worst of the virus to date, however that could change as we move into colder temperatures. It is also likely that spending across all sectors (except perhaps government) is down as families and individuals react to the uncertainty that is emerging. Certainly hospitality, events, and tourism are taking a big hit. In some areas, industries such as logging have not worked for 5 weeks or so.

Discussion has been that a 30% drop in revenue is forecast. If that becomes reality many businesses large and small will struggle. The message to support businesses is for consumers to try to live as normally as possible and that includes maintaining your spending habits as best and as safely as you can, and to look after yourself and those around you. In other words “Support your local”. This could reduce the harm that enforced isolation has on the country and its communities and businesses.

The first option to assist you and/or your business is to check what insurances you have to cover your business and personal issues. Read Here - Chapman Tripp - COVID-19 business protection check list

Banks and financiers may also be able assist. The RB measures to reduce the interest rate will probably have a small impact. The larger impact will be from the RB deferring the increase in capital that banks hold, and will support any increase in the banks’ ability but not necessarily willingness to lend further or to reschedule repayments, as we expect that the fundamental rules around lending will continue to apply. So a sound underlying business with good history and prospects, security and cashflow will be required.

The government support package announced yesterday is aimed to inject money into the economy to support job retention. The sick leave and one off 12 week wage subsidy packages look to be available to every business that has experienced or expects to experience a 30% or more drop in revenue due to Covid 19. There are limits to how much each of the packages will assist for example the wages subsidy is capped at $7,029.60 per employee working 20 hours or more per week and $150,000 per employer. Assuming a 40 hour week the subsidy will assist business payroll funding by paying $14.62 per hour per employee up to a maximum of $150,000. As the subsidy does not abate, the per hour impact of the subsidy increases if employees work less hours until the minimum subsidy per employee of $350.00 per week for employees working less than 20 hours per week kicks in.

Some steps toward mitigation need to have been taken such as discussions with your bank, and you have a best endeavours obligation to maintain employment levels and to pay each employee at least 80% of their normal income for the subsidy period.

While property owners receive some other income tax support with cashflow impacts into the years ahead, unfortunately for those who lease there is no other support than the wages subsidy.

For businesses which have lost large percentages of revenue and support either a large number of employees, or have high fixed overheads the government measures will make some difference but probably not enough to trade without running the risk of breaching directors duties, if the company trades while insolvent.

So despite the support package it seems inevitable that some businesses will close, and possibly never re open unless arrangements can be made with their creditors.

If maintaining your business is too hard – there are a range of options

If your business was facing difficult times pre coronavirus and the impact of coronavirus is the last straw, then we can provide a number of options to wind up your company. If you think you can trade out and it is time that is needed to pay suppliers, then a formal or informal compromise with creditors may be an answer.

It is our business to help struggling businesses and to provide stress free advice. We seek to bring an end to messy situations and we are here to support you/your business. We may not always have the answer you want to hear, but we can offer options.

Some early advice is:
* If you are having difficulties or concerns about meeting your normal tax obligations due to the effects of COVID-19, Inland Revenue has a range of ways to help depending on your circumstances.
* Get in contact with your bank if you’re experiencing cash flow issues, especially in regards to loans repayments or lack of funding. They might be able to help or put you in touch with someone who can.
* Support local business
* Be health conscious
* Get advice if by trading you could be creating serous loss to suppliers/creditors
* Seek advice from your Chartered Accountant or Trusted advisor

Options for insolvent/struggling companies are:
* Company Compromises
* Voluntary Administration
* Liquidation
* Receivership

We assist companies and individuals facing financial difficulties through a range of insolvency services including liquidations, company compromises and receiverships. Our specialist advisors will guide you through your options.

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

Taking steps to ensure your company remains financially sound will minimise the risk of an insolvent trading action and facing personal liability. It may also improve your company's performance.

There are serious penalties and consequences of insolvent trading including civil penalties and criminal charges. Insolvency can be established by either of the Cashflow test or Balance Sheet tests. Note, importantly, that only one of these tests needs to be met to establish insolvency.

1. The Cashflow Test is simply whether your company can pay its debts when they fall due for payment. If you are paying your trade creditors at 90 days plus and yet the trading terms are 30 days, your company could be insolvent.
2. The Balance Sheet Test is whether the company's assets are exceeded by its liabilities. It is important to point out that this test must include contingent or prospective liabilities.

A solvent balance sheet may include items that are overstated, such as obsolete stock, plant, and work in progress, or debtors that are not really collectable. After deducting these items many balance sheets become insolvent.

Your company must keep adequate financial records to correctly record and explain transactions and the company's financial position and performance. A failure of a director to take all reasonable steps to ensure a company fulfills this requirement contravenes the Companies Act 1993.

Some of the key signs of insolvency are:-

• Bad management or no management
• Cash flow difficulties
• Excessive debt and under-capitalisation
• Inadequate accounting
• Reliance on a small number of customers, suppliers etc
• Net asset deficiency (liabilities greater than assets)
• Exceeding overdraft facilities or defaults on loan or interest payments
• Increased borrowings
• Statutory demands, solicitors' letters, summonses, judgements or warrants issued against the company and winding up notices
• Lack of cash-flow forecasts and other budgets
• Change of bank, lender or increased monitoring/involvement by financier
• Reliance on key customers
• Loss of long-standing suppliers
• No directors' meetings, management meetings, or clear objectives
• Contract disputes
• Creditors unpaid outside usual terms
• Issuing post-dated cheques or dishonouring cheques
• Suppliers placing the company on cash-on-delivery (COD) terms
• Payments to creditors of rounded sums that are not reconcilable to specific invoices
• Part payments and instalment plans with essential creditors
• Failure to pay GST and PAYE
• Late collection of payments from debtors
• Artificial valuation of assets
• Higher stock levels with static sales
• Shareholder disputes and director resignations, or loss of management personnel
• Increased level of complaints
• Sale and leaseback of assets
• Factoring of debtors
• Unrecoverable loans to associated parties
• Injection of directors' own resources to provide short-term relief

This list is by no means exhaustive, but it does give an idea of where to look for signs of impending trouble. You should constantly be on the look out for these signs - because your creditors certainly are!

As a director you need to be aware of your options so that you can make informed decisions about your company's future. If your company is insolvent you must not incur further debt in the name of the company or you could be made personally liable for that debt. Options include refinancing or capital injection (to return the balance sheet to a solvent position or to remove cash flow pressures), sale or acquisition, restructuring or changing company activities, and appointing an external administrator. Generally the matter is left too late and the only options left are to appoint a voluntary administrator, receiver or a liquidator.

Voluntary administration

Voluntary administration is designed to resolve the company's future direction. The voluntary administrator takes full control of the company to try to work out a way to save either the company or the company's business.

The aim is to administer the affairs of the company in a way that results in a better return to creditors than they would have received if the company had instead been placed straight into liquidation.

A mechanism for achieving these aims is a Deed of Company Arrangement. VA however suits certain companies and can be a costly exercise.  A company compromise can achieve similar results.

Liquidation

A liquidator is an independent person who takes control of the company so that its affairs can be wound up in an orderly and fair way for the benefit of creditors. Sometimes business assets can be sold at market value and a new business resurrected.  It pays to get good advice to avoid being held personally liable and have the sale managed by the liquidator.

Receivership

A company goes into receivership when a receiver is appointed by a secured creditor who holds security over some or all of the company's assets. The receiver's primary role is to collect and sell sufficient of the company's charged assets to repay the debt owed to the secured creditor. Sometimes there is nothing much left and liquidation can also follow.

Of course, if your company is in financial difficulty, the best scenario is to avoid a crisis in the first place, and the best way to do this is to seek independent expert advice in respect of your duties and the options available.

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.