SUPREME COURT

Dominion, Volume 9, Issue 2716, 10 March 1916, Page 9

SUPREME COURT

TAUPO TOTARA TIMBER COMPANY DEBENTURE HOLDERS' PETITION A schemo of arrangement, propos_ed muTcr. Suction "2(50 of fclic Companies Act, 1908, in connection with the Taupo To vara Timber Company, Ltd., and tho AVellington Industrial Development Company, Ltd. (boui in liquidation), iias been objected to by certain deben-luic-fiolders, iuul the objection was brought under the noticc of t' , c i Supreme Court in tho form of a petition neurit by I-fis Honour Mr. Justice Husking yesterday. Tho petitioner wns 'I'lromas Richard Moore, of Palmorston North, who held 25 debentures (nominal valuo £100 each), and who believed that tho holders of 69 other debentures dissented from tho scheme of _ arrangement and approved of his petition. Mr. A.. Cray, K.C., with him Mr. R. Kennedy, appeared for ilio petitioner, wihlo Mr. C. P. Skcrrett, K..C., with him Mr. O. H. Howard, appeared for the companies. From tlio facts laid betoro tho Court, it appeared that- m 100" 7 the two companies issued a sviies of <lcbenturcs of £25 each, totn'lin.! £100,000, of whicih ' W.PIS is outstanding. They wore to be redomiahle in 1917. Tho debentures were secured over the whole of the assets of the company, except stock and unctillod capital. Tlio cluof asset of tlio two companies was tho PtitnruruMokai tramway, which was constructed originally for tho purpose of working tlio company's bushes in tho North Island. 'rlie'line had been built i'or a distance of fifty miles from tho Auck-land-llotorua line to Mokai, and. with rolling stock, was valued at £130,000. Tho assets of the Taupo Totara Company also included standing timber on Native lands which were vested in a separate company for the pnrposo of complying with the provisions of tlio Native Land Act in regard to aggregation. The other company had tho samo shareholders as tho Taupo Totara Timber, Company, tho officers and directors were the same, and the assets (the railway) wero the same, together with a largo tract of freehold land, of about ■13,000 acres, containing standing bush. For some timo past tho two companies were engaged in endeavouring to cot passed legislation giving them power to extend the railway to Taupo, in tho be--1*? that their profits would be increased by tfie consequent extra traffic. That legislation was passed in 1914. Since then a resolution had been passed at a ' mooting of shareholders approving of a soliomo of arrangement, under which a new Taupo Totara Timbor Company was formed. Fresh debentures were to ho issued in place of old ones (which had to be surrendered), payable in 1922. Tljo petitioner contended that as soon as tho two companies went into liquidation *io„ original debentures be' Same immediately payable. The dissenting debenture-holders did not attend tlio mooting at which tho scheme ,was agreed to, and the proceedings worn taken under Section 26 of the Companies Act, wliicTi gave' power to to the Court, and gave the Court power to amend, vary, or confirm tlio scheme. In this instance, tho Court was asked not to allow the scheme of arrangement to procecd unless tlio dissenting debenture-holders were finst pakl off. Legal argument connected, with tho petition occupied tho Court until 4.30 p.m. His Honour reserved his decision.