Bishop Warden Seeks Nosh Creditor Meeting
Bishop Warden Seeks Creditor Meeting to Replace Liquidators of Old NGL Limited (Nosh)
Commercial debt buying
company Bishop Warden Limited has requested that liquidators
Shephard Dunphy call a meeting of creditors of Old NGL
Limited (“Old NGL”) (in liquidation) previously Nosh
Group Limited, previously Veritas Holding
Limited.
Shephard Dunphy wanted to “dispense with a meeting of creditors” given the state of Old NGL’s assets and liabilities.
Bishop Warden Director Matthew Blomfield said his company, a creditor, would seek to have a liquidator appointed with the will to investigate and ask questions of the directors and, if it is found that they acted outside the law, to hold them accountable for the failure of the Nosh business.
“Bear in mind that in 2014, Nosh Group appeared to be a genuine New Zealand business success story,” said Matthew Blomfield.
“We need a liquidator prepared to take a very hard look at these directors’ actions, what they knew, when, and whether there is any possibility of sheeting home some liability for this disaster.
“Here is a situation where a shareholder puts a company into liquidation with the inevitable consequence that there is little or nothing of value left to pay trade creditors any of the $1.6 million they are owed.
“These creditors, and there are around 150 of them, are in many cases smaller, family-owned businesses that supplied Old NGL with the ability to keep its stores trading.
The ‘Liquidators’ First Report shows not only that Old NGL owed unsecured creditors $1.592m, but that the IRD as a preferential creditor is owed nearly $150,000. When the IRD is not being paid, there are some serious questions that must be answered.
The Nosh stores started trading in 2006 providing high quality, fresh New Zealand and overseas products to a more discerning consumer market segment. At the time Veritas bought the company in 2014 it had more than 130 staff and annual revenues of more than $25 million.
At the time of purchase, Veritas’ Chairman referred to Nosh’s “impressive revenues”, and “considerable potential for growth and innovation” and his confidence that “we can add substantial value to the business.”
Veritas Director and Mad Butcher CEO Michael Morton (who is currently seeking re-election to the board of Veritas), also referred to the “synergies available”, adding that “it gives us a number of exciting development opportunities across the Veritas Group. "
Eight months later, on May 28 2015, Veritas reported that the business turnaround was "progressing well, although [it] is behind schedule. The company advised a break-even position in the second quarter of the 2016 financial year.”
A little over a year later, in August 2016, there was no talk of ‘break even’. Now Veritas referred to the performance of Nosh as "disappointing." Trading losses had widened from $1.19 million a year earlier, to $1.88 million.
Just four months later and the dream was over with Veritas’ funder, ANZ Bank, demanding that the business be wound down or sold.
In February of this year Veritas sold Nosh for $4m, including an agreement that the new purchaser would pay Nosh’s creditors.
“Regardless of that agreement, Bishop Warden believes that Old NGL and Veritas should pay the creditors. The debts were incurred under their watch, therefore they should pay up.”
Veritas listed on the NZX through a backdoor listing. The company raised $25m through a public share offer priced at $1.30. As at 7 September the shares were trading at $0.12c
ENDS