New Zealand employees of liquidated training company Binyl Pty’s New Zealand operation Executrain will get no payout, as they are behind Inland Revenue as major secured creditors.
Executrain owes IRD $548,277, about two-thirds in unpaid GST and the remainder in unpaid PAYE.
A report by liquidator McDonald Vague shows debts of $1.1 million and assets of only $120,000.
"The director of the company has advised the reason for the failure of the company is due to a number of landlords distraining against company assets for unpaid rent and outgoings," says the liquidator's report. As a result, the New Zealand operations had to close.
The report says shareholders approached McDonald Vague to act as liquidator and signed a resolution to place the company into liquidation. However, as the company was an overseas entity, the shareholders had to apply to the High Court to ratify their decision. While the application was being prepared, the director authorised McDonald Vague to act in respect of the assets.
McDonald Vague has been appointed only as interim liquidator and risks losing involvement with the case after the liquidation hearing in the Auckland High Court on August 7. Executrain was only a trading name for Binyl's NZ operations, not a separate company.
Computerworld understands the Australian liquidator is trying to take over the whole exercise. Partner John Vague, however, says his firm is entitled to stay in the picture, so that New Zealand creditors getting a payback can be protected under New Zealand law.
Vague says he cannot reveal the identity of unsecured creditors, “even to other creditors”. A test case arising from a previous liquidation established that point. Several organisations reported to be creditors for training services have denied to Computerworld that they have spent any money on training not received.
The partner of a former Executrain employee, who has been handling employees' affairs, says lawyers have advised the employees are entitled to take legal action in respect of their unexpected dismissal. However, with no money in the company after IR has been paid out "there would be no point".