Creditors join forces over $24m-loss firm

By Nick Smith

Friday 22nd February 2002

Creditors of Wilson Neill Corporation are banding together for a make-or-break court hearing scheduled for March 7 as the sharemarket dog reported a loss of just over $24 million.

The company has finally filed its accounts for the 15 months to June 30. They show a total loss of $24,039,941.

The balance sheet would show a deficit of shareholders' funds of $18 million were it not for the unexplained inclusion of $26.5million of "shareholder contributions."

The $24 million loss includes writedowns of $15.3 million in subsidiaries IT Media and Radionet.

The accounts were prepared on a "going concern" basis and add the profitable restaurant Iguacu will be sold while other subsidiaries will be in the black in the current year.

The first winding up proceedings brought by Progressive subsidiary Caledonian Leasing will be heard in a fortnight. Other creditors will seek to have their applications heard at the same time, and a Progressive spokesman said the company would not oppose such a move.

Yippee managing director Mark Stuart said he would seek to join his action to Progressive's.

Other creditors include accounting firm Gosling Chapman and advertising agency Omni Group.

Omni director Terry Renwick said he would be seeking legal advice and "if it is logical to [join forces] then that's what we will do."

All parties will have talked to a liquidator, with a likely appointment being PricewaterhouseCooper's John Waller.

Receiver for failed internet company Yippee, Bernard Montgomerie, although a popular choice, is not in the running.

Mr Montgomerie has abandoned legal action against Wilson Neill, saying it could not afford to pay any damages or costs as a result of the company deciding to not go ahead with its acquisition of Yippee. He has also called for Wilson Neill directors to be banned and if appointed liquidator, would almost certainly pursue legal action against chief executive Phil Vosper, chairman Trevor Mason and Maurice Crosbie.

Mr Waller confirmed that he had talked to several creditors about the company but could not comment further.

But if Wilson Neill cannot avoid liquidation, debenture holders are likely to appoint a receiver a day or two before the March 7 court hearing.

Debenture holders for Wilson Neill and its subsidiary IT Media include Eric Watson's Elders Finance, Gold Band Finance and the BNZ.

A receiver is likely to pick the Wilson Neill bones nearly clean before handing the carcase over to Mr Waller.

IT Media director Tim Connell accepted Wilson Neill shares as payment for the publishing company involved with failed internet company Flying Pig and scrapped business newspaper NZ Business Times. It still publishes NZ Rugby World and is involved with Foodtown magazine.

Progressive is "deeply concerned" about the future of its magazine as a result of its relationship with IT Media.

Although it pays IT Media for sales of the Foodtown magazine, it actually signed a contract for the magazine with a different company, which it declined to name. Progressive is investigating the anomaly.

The Companies Office may still prosecute Wilson Neill for late filing of its accounts.

Comments from our readers

No comments yet