Westpac, a creditor of S Resources, formerly SolNet Ltd, has been investigating the affairs of the one-time Sun Microsystems agency.
At a creditors’ meeting in Wellington last week Sun Microsystems’ lawyer Richard Gordon of Bell Gully expressed confidence in the investigative work — done with the help of accountants Ferrier Hodgson — so far.
Sun and Westpac convinced other creditors to have two Ferrier Hodgson staff, Grant Graham and Stephanie Jeffreys, appointed liquidators in place of Richard Simpson and Ronald Walton, who were appointed by the directors of the liquidated company.
“When a company sells its entire business to another company run by the same directors [a reference to SolNet Solutions, the latest incarnation of the former Sun agency] a short time before going into liquidation, you don’t have to be a rocket scientist to have some suspicions about what is going on in that company, and to ask questions about directors’ responsibilities,” Gordon told the meeting.
He declined to enlarge on his remarks when questioned by Computerworld, and referred all questions to Sun’s Australian media liaison staff. They had no comment last week.
Sun claims S Resources owes it $7.5 million.
The changing of SolNet Ltd’s name to S Resources followed the acquisition of SolNet’s “brand assets” by SolNet Solutions, SolNet Ltd head Mark Botherway has told Computerworld. Other SolNet companies have similarly undergone name changes: SolNet Holdings has become SRL Holdings Ltd, SolNet International has become S International Ltd and SolNet Systems has become S Systems.
Emphasising that he did not intend to imply anything negative about Grant Thornton or its representatives, Gordon said there would inevitably be a question of conflict in having the liquidation handled by someone appointed by the liquidated company’s directors and solicitors, who were involved in putting together the transfer of the S Resources business to SolNet Solutions.
Since Westpac had already begun investigating the company’s affairs, it would make for a speedier resolution to have the liquidators suggested by the bank appointed in place of Walton and Simpson, Gordon added.
The first report of the original liquidators discloses a debt of $16,589,866, owed by SolNet Holdings to S Resources. This forms the bulk of S Resources’ “assets”.
“We have been informed by management that it is unlikely that the debt due from SolNet Holdings will be recovered,” says the original liquidator’s first report.
SolNet Holdings director Murray McNae says the $16 million is “just ordinary inter-company debt”. It is unlikely to be recovered, he says, “because SolNet Holdings has debts to other parties”.
Asked whether the holding company is solvent, McNae says “that will come out in the fullness of time”. He refuses further comment.
A Wellington High Court hearing two weeks ago, before Master Gendall, was intended chiefly for the purpose of appointing a liquidator, but S Resources directors had already put the company into liquidation, appointing Simpson and Walton, so the action was adjourned. It is scheduled to come up in court again today.
Sun in Australia and Gordon had no comment last week on what they expect from today's hearing.
New liquidator Grant Graham says before deciding on the next course of action, he and his colleague naturally have to examine the company’s books and records and get information from Simpson and Walton on creditors’ claims.
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