PETITION FOR WINDING UP

Southland Times, Issue 24838, 2 September 1942, Page 5

PETITION FOR WINDING UP

Associated Gold Dredges, Ltd.

(P.A.) CHRISTCHURCH, September 1. Leave to present a winding-up petition against Associated Gold Dredges (N.Z.), Limited, was granted to A. and T. Burt, Limited, Dunedin, by Mr Justice Northcroft in the Supreme Court today. The application was made under the Debtors Emergency Regulations by the company, which is one of three firms that built dredges for Associated Dredges and were owed a total of £49,012. Mr J. M. Paterson (Dunedin), for A. and T. Burt, Limited, said the three dredges had been built and the amounts owing were: Burts, £19,008; Dunedin Engineering and Steel Company, £14,220; Andersons, Limited, £15,784. The last claim might be subject to adjustment Mr Paterson said the company’s nominal capital was £450,000 in 445,000 ordinary shares of £1 each and 100,000 deferred shares of 1/- each. The subscribed capital was £295,000 ordinary and £19,050 deferred. The Bank of Australasia had the first floating charge on the assets of the company and a debenture for £50,000 was given to the bank on October 13, 1939. The company’s total liabilities at present were £104,235. The principal liability was £50,965 to the Bank of Australasia, but this had been reduced by a payment to £38,965. BANK’S POSITION Mr Paterson submitted that at present the Bank of Australasia was exercising the rights of receiver concerning tire company’s assets. That led to the trouble the contractors had in getting paid. The bank was acting as actual receiver without having taken any steps necessary to crystallize its floating charge on the company’s assets. When the company knew these proceedings were going to be taken by the unpaid contractors and there had been protracted negotiations, it paid £12,000 to the bank in reduction of the floating charge. That was a most daring thing to do. Mr A. W. Brown, for Associated Dredges, said the present position was that a call was being made which would net more than £14,000. Any order for winding-up at this particular stage would be disastrous for the company. The company was solvent, but the difficulty in the past was that it had not been allowed to use the money available. Mr Brown asked that the Court should postpone the case for some reasonable time to allow the company to make some arrangements by which its debts could be met to satisfy the creditors. Within a' few months the contractors would be receiving payment. A call was being made and gold production was increasing. Mr Justice Northcroft said he was of the opinion that the leave sought should be granted. The special regulations under which the application had been made had withheld from these creditors the right to pursue their normal remedies. They had been rendered impotent against a stronger and more influential creditor than themselves. In all the circumstances the creditors were entitled to pursue their rights. Costs were awarded against the company.