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March 26, 2006
Sunday Star Times tries to get it right
The SST has published a piece this morning on a business I ran that collapsed in 1998. The liquidation was covered at the time by NBR, the Herald and other media...but has re-emerged because of this week's article on Parker.
No problem with that, I expected it, although if the SST devoted its energies to probing the backgrounds of public officials it might actually be more relevant.
But the point of this is that the SST article errs by ommission because it didn't ask enough questions of me or allow me to elaborate.
The company went into liquidation because of a $45,000 bill that we were late paying. The creditor refused to accept a repayment schedule and instead pushed for liquidation regardless. The company at the time had contracts for work in progress that later generated more than $150,000 of revenue, but the standard contracts we used at that time included a clause that they were annulled if the publishing company was placed in receivership or liquidated.
After discussions with lawyers and liquidators and the contractees we set up a sister publishing company, which continues successfully to this day, which would continue to work on the projects in the hope of generating enough revenue after staff wages and publishing costs to repay creditors of the first company.
The liquidators approved of this, and also recommended changing the name of the liquidated company so as not to interfere with Howling At The Moon's continuing brand and the attempt to generate sales to repay creditors.
Had the $45,000 creditor not forced liquidation, the company would have traded its way out of the temporary difficulty.
However, at the time of this happening we had a six month old lawsuit in train against another major supplier who had failed to deliver our entire Christmas book releases until Christmas eve...overshooting the deadline by four weeks.
We sued them for $90,000, they counterclaimed for $100,000 which was their print bill - even though they admitted to our lawyers they had failed to meet the contract delivery terms the factory did not feel it was responsible for "consequential losses".
The liquidator decided not to pursue the claim further because of the dollar cost involved in corporate litigation...so what was a $45,000 loss turned into - when liquidators fees were added - a $180,000 loss.
The liquidators with my assistance realised $65,000 of assets, but the two major creditors - the bolshie one and the print factory that had missed the delivery deadline, got nothing. The secured creditors, which didn't include me or any investors, shared the proceeds with the liquidator.
While regrettable, the big two were authors of their own misfortune. A lot of small creditors were repaid by our new company because we continued to trade with them, and we paid them off over time. I still owe $20,000 to a personal friend and will meet that debt.
Sadly, although the new projects were successful, they didn't meet provide sufficient income to repay the big two...
This wasn't through lack of trying. One of our books, an NZ bestseller, was picked up by HarperCollins international but they messed up the marketing of it and the book flopped in the UK and US..had it performed comparitively as well as it did in NZ it would have generated up to half a million dollars in revenue for the liquidators.
Hope this clarifies it...
Posted by Ian Wishart at March 26, 2006 09:32 AM
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Comments
Doesn't really matter. You weren't planning to stand for Parliament were you? If not, who gives a toss?
Posted by: Merv Dermott at March 26, 2006 03:44 PM