BWA Insolvency appointed as administrator for Shanton
MEDIA RELEASE FROM BWA INSOLVENCY LTD
JANUARY 12, 2015. FOR IMMEDIATE RELEASE
BWA Insolvency appointed as administrator for Shanton Fashions Limited
The directors of Shanton Fashions Limited have placed the company into voluntary administration, with insolvency expert Bryan Williams of BWA Insolvency appointed as administrator.
The move is in response to Shanton’s credit facilities being withdrawn and demand made for immediate payment of the overdrawn balance. It is too early at this stage to identify how much is owed to creditors.
“Despite the company having its liquidity greatly reduced, the directors are still of the view that the business can continue and the brand survive. They are highly motivated to achieve this outcome, which is why they have elected voluntary administration [VA],” Williams says.
“VA is the formal insolvency process adopted where a presumption exists that the business can continue in existence. It is the legal framework that enables the potential for a workout from difficult economic circumstances. Liquidation is terminal in the company’s life whereas VA offers hope of commercial revival brought about through the skills of the administrator to focus and harmonise all the resources of the company into a recovery plan.”
The well-known women’s fashion chain has 37 stores across New Zealand and employs approximately 240 people.
Payment of staff wages during administration will continue and unpaid wages and holiday pay are classified as preferential. Further investigation is required before any decisions are made around restructuring.
“The clear intention is to preserve the inherent value in the brand. This is largely comprised of the product that it sells, the location of it stores and the people that design, make and sell the product,” Williams says.
In the meantime, business will be conducted as normal, except that giftvouchers and layby purchases will need to be dealt with directly through the office of the administrator.
The amount owed to creditors is expected to be made known once the director’s statement of position is handed over to the administrator – within five working days of Williams’ appointment. The statement of position will be presented to the first creditors’ meeting, required by law to be held within eight days of the commencement of VA.