For a company director to allow a company to continue to trade while it is insolvent is a breach of duty under section 135 or 136 of the Companies Act. It is the duty of a Liquidator to report on any such reckless trading that is uncovered in the course of his or her efforts on behalf of creditors to recover any debts owed once the company is put into liquidation. The identification of reckless trading does give rise to possible civil action from creditors against the directors: creditors who may choose to seek reimbursement from the company for any shortfall in debts owed them. Consider a company that purchases a property for $1.9 million dollars, borrowing all the money to pay the purchase price. A director who finds that the company is unable to meet interest repayments on a first and second mortgage, should realise that a mortgagee sale is inevitable unless he can refinance the loan, source capital from elsewhere or gain assistance from a kindly tooth fairy. If however, the director allows debts to mount up for months due to unpaid interest and persists in carrying out trading operations throughout the period of insolvency, that would constitute reckless trading by the company, for which he is directly responsible. All income gained by the company over the period of insolvency would be subject to a rightful compensation claim be creditors via a civil action in the Court. If the company director failed to produce a credible record of company income deposited in a company bank account over this period, he would have committed an offence under the Companies Act 1993. Directors who fail to file an annual return after an extended period of such reckless trading, should be banned from being company directors. A director who through mismanagement allows two of more of his companies to be put into liquidation is more than likely to be banned as a director by the Ministry of Economic Development under s. 385 of the Companies Act 1993.
Smacking appeal goes to Supreme Court – 7 July Newstalk ZB
Christchurch father Jimmy Mason has been given leave to appeal by the Supreme Court. The 51-year-old was sentenced to nine months supervision and ordered to undergo anger management courses after a jury found him guilty of assaulting one of his two children. The case was widely seen as a test of the anti-smacking laws as Mason publicly claimed he’d done no more than flick his son’s ear.
The Supreme Court has just announced it will permit him to appeal his conviction on the grounds that combining two allegations in a single count resulted in a miscarriage of justice. The two allegations are punching a child and pulling his ear.
Killer wanting porn in prison complains Truth newspaper is banned.
The Dominion Post (8 July) reports that a convicted killer is complaining that porn magazines and other “literary material”, including the taloid newspaper Truth Weekender are banned in jail. Details emerged earlier in the week about Stephen Thomas Hudson’s High Court civil action claiming a list of banned reading material given to him breached his right to freedom of expression. Hudson, 39, who is serving a life jail term for the murder of Nicholas Pike, was complaining that pictures had been confiscated from him. The Society points out that the NZ Truth (now replaced by the Truth Weekender containing very similar content) is viewed by many as promoting moral decay and degeneracy.
Liquidation of Truth Publications Ltd: Conflict of Interests? Phoenix Companies?
On 3 November 2009 the NZ Herald reported that the publisher of the tabloid newspaper NZ Truth, Truth Publications Ltd, had gone into liquidation owing “unsecured creditors and subordinated lenders $622,074”. A decision had been made to “sell its assets to the company’s masthead owner, Multimedia Solutions, for $70,000.” Truth publications Ltd (In Liq), directed by Dermott Malley, John Andrew Pin and Matthew William Horton, ceased trading on 31 August 2009 and was placed into liquidation on 21 October 2009. The NZ Herald notes: “A related party of Truth Publications called in liquidators Meltzer Mason Heath in September to find out how much the company would be worth.” (See companies diagram here.)
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What money is left for creditors of Truth Publications Ltd (In Liq)?
A liquidator’s report on Truth Publications Ltd (In Liq) dated 21 June 2010 has just today (5 July) been registered on the Companies Office website. It shows the balance for receipts and payments for the period ended 20 April 2010. A six-monthly report from the Liquidator was actually due out by 21 May 2010 informing creditors and shareholders on the conduct of the liquidation during the preceding six months. The report registered today only gives details on a meagre $5,850.79 of receipts comprising Pre Liquidation PAYE Refunds and GST Income. All of this money has been absorbed funding the Liquidator’s Remuneration and Disbursements, covering advertising costs, bank fees and GST Expenses. Whatever funds, however miniscule, are still held by the Liquidator, are subject to further costs of winding up. However, an estimated $622,000 is still owed to “unsecured creditors and subordinated lenders” as revealed in the first liquidation report. [Read more…]