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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…
The rush to closedown our offices and shift to working from home is now over for most of us. We hope that everyone was able to do what they needed to. Business goes on but in a different way to what we are used to. Perhaps there is an opportunity to take stock of the situation?Many of our clients have faced complete shutdowns of their businesses and we are now looking forwards to assisting them with cashflow planning for the next month or so, and then how to restart their businesses once the lockdown is over.There is a base level of government support available at the moment for employees, contractors etc, and likely bank support to work through for solvent…
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…
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. The Cashflow Test is simply whether your company can…
We all know it’s frustrating not being paid. What’s worse is that not getting paid affects your cash flow and chasing bad debts takes time that could otherwise be spent doing productive work. If you decide that your best option for resolving the debt is to liquidate the debtor company, the process generally takes at least three months. There are a number of milestones along the way, which are outlined below. Provided the debt is not disputed, the first step is to issue a statutory demand. The purpose of the statutory demand is to test the company’s solvency – the presumption being that, if the company is solvent and the debt is not in dispute, the company will pay the…
Whether or not a business decides to transact all or part of its business by way of barter, rather than by cash payment, is a decision for the directors but, in making that decision, directors need to remember the old business adage – “Cash is King”. There can be advantages in using the barter system to settle transactions between your business and your clients, but you will still need to have sufficient cashflow. There are still wages and taxes, including GST on the barter transactions, which you will have to pay using money and there will be other goods and services that you require that you cannot make payment for using barter credits. If you cannot find enough business expenses…
It is an unfortunate truth that, generally speaking, business owners only approach an Insolvency Practitioner about the financial plight of their company when the problem is terminal, and the only viable option is liquidation. The approach often happens when the pressure on the directors of the company gets unbearable and it starts to effect their health. With a large number of New Zealand companies having directors and shareholders who have personally guaranteed the company’s debts to financial institutions and suppliers, the pressure that comes with running a struggling company is intensified by the fact their personal assets could also be at risk. It isn’t unusual, when first meeting with directors and shareholders in this position, for them to tell us…
The much-delayed City Rail Link (CRL) is having an enormous impact on businesses affected by its mammoth construction works. A cluster of financially devastated Albert St businesses are struggling for their financial future due to a blow-out in the completion of the CRL construction works. City Rail Link Limited was set up in June 2017 and is a joint venture between the Government and Auckland Council. Initial excavation work on Albert St commenced in July 2017. The CRL is New Zealand’s biggest ever transport-related infrastructure project. It is designed to double Auckland’s rail capacity. It comprises a 3.45-kilometre dual-tunnel underground rail link sunk up to 42 metres beneath the centre of Auckland’s CBD. Businesses Under Stress Debt levels are rising…
In many cases, the director of a company will also be a shareholder – but the roles are separate and have different powers and responsibilities. There can also be different levels of control within those roles. In this article we will look at the differences and discuss how those can be managed to lessen the chances of an impasse on any issue. SHAREHOLDERS: The Shareholders of a company have the rights and obligations set out in Part 7 of the Companies Act 1993 (the Act). For the most part, those powers can be exercised by an ordinary resolution passed by a simple majority of those shareholders entitled to vote and voting on the question. There are, however, certain powers which…
SMEs make up a large part of the insolvency work that we at McDonald Vague handle and the reasons for those insolvencies range from events beyond the control of the company officers to a complete lack of knowledge and understanding by the company officers of what is required of them. • What led to those companies failing?• What were some of the red flags that might have been seen along the way? CAUSES OF FAILURE: The causes of company failures, as reported to us by the directors, are many and varied and the real reason is not always identified correctly by the directors. There are, however, common themes that come through in the reasons for company failures. All the Eggs…
New Zealand's construction sector, has a string of serious issues that bedevil the industry. These problems are not just confined to the major construction companies themselves. They are having a seriously detrimental impact on the fabric of trade suppliers and sub-contractors that bind the industry together. Underpinned by Auckland and Canterbury’s buoyant growth builders should be comfortable. So, why are increasing numbers of construction companies collapsing and going into receivership, declaring insolvency or being faced with the prospect of liquidation? A Grim Roll Call While some firms continue to struggle dealing with leaky building and council compliance regimes, much of this problem can also be sheeted home to New Zealand construction firm’s apparent willingness to take on too much risk…
Employees’ Employment on Liquidation When a company goes into liquidation, all of the company’s employment agreements may be terminated. If the company has employees when it is put into liquidation, the liquidators will usually visit the business and inform the employees of the liquidation. And, employees who have outstanding entitlements will be notified of the liquidation in writing, which is normally sent to the employee’s last known email or postal address. If the liquidators continue to trade the business or they require the expertise of certain employees after the company’s liquidation, the company in liquidation will re-employ the employees they require for the period they are required, which could be anywhere from a few days to months. Employees who work…
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