$15.5m. Deficit In H. G. Palmer

Press, Volume CV, Issue 31006, 11 March 1966, Page 11

$15.5m. Deficit In H. G. Palmer

(N.Z. Press Association —Copyright;

SYDNEY, March 10.

A group deficiency of nearly 15.5 million dollars was revealed in the statement of affairs of the H. G. Palmer group of companies, which was released in Sydney today.

Presenting the statement, which is of the company’s affairs at October 26, 1965, the receiver, Mr C. H. R. Jackson, noted that the position disclosed varied “substantially” from that shown in the consolidated balance sheet of the group at June 30 last year. He pointed out that at June 30 stockholders’ funds (subject to adjustment envisaged by the directors at that time) amounted to 9,817,516 dollars. “The group deficiency as shown by the statements of affairs amounts at October 26, 1965, to 15,462,814 dollars, so that there is an over-all variation of 25,280,330 dollars to be explained,” he said. Mr Jackson said an approximate break-down of the 25 million dollar figure included more than 11 million dollars in additional provisions for bad and doubtful debts. In his comments on the statement of affairs, Mr Jackson said: “It is clear that, unless the values of the assets as shown can be preserved or improved, the claim of unsecured creditors will be valueless and the claims of debenture holders will be in jeopardy.

“In my opinion, which I have formed by my experience in other matters, the losses on realisation, particularly of stocks, plant and equipment, the bad debt losses and the costs of collection of debts would be very large if operations were to be discontinued at this stage and would exceed the surplus of 2,154,030 dollars to unsecured creditors which has been arrived at by the process of estimating the value of assets on going concern bases.

"Having regard to the situation generally, it is in my view essential that every effort be made to maintain the organisation as a going concern in the interests not only of the debenture holders, but of all the unsecured creditors who rank after them.” Mr Jackson commented: “It is quite impracticable at this juncture to assess what would be the quantum of available funds for ultimate distribution amongst unsecured creditors in any particular subsidiary after providing for payment of secured creditors in- , eluding debenture holders.”