An application to put Auckland-based distributor Unilogic into liquidation is to be heard in the High Court next month.
In a letter to creditors, managing director Alastair Chater says Unilogic had all but ceased operating by the end of December due to a lack of sales. It has now stopped trading altogether.
Last December Computerworld found that Unilogic's doors were closed and its telephone was disconnected, although at the time Wellington-based distributor Melco and Seagate Software both said the business was still operational.
Melco took over an agency for Seagate Software's Crystal Business Intelligence from Unilogic last year. Unilogic decided it would focus on direct sales of Seagate Crystal Info in a value-added capacity.
However, last month Chater approached insolvency specialists McDonald Vague and Partners for assistance after becoming aware Unilogic would be trading as insolvent if it continued. Partner John Vague has told creditors that it's estimated that Unilogic owes creditors $172,850. He says an application for putting the company into liquidation has been filed by the Inland Revenue commissioner and will be heard on April 1 in the Auckland High Court. Unilogic's statement of position shows Inland Revenue is owed $21,585, and is a preferential creditor for just over $18,000 of that.
More than $8000 is owed in wages and holiday pay. Trade creditors (unsecured) are owed $146,890. Vague says Chater will be unable to meet personal guarantees he offered to a number of unsecured creditors. The statement of position shows $3800 in realisable assets.
Chater says in his letter to creditors that Unilogic was formed in 1993 to provide information management tools to business users, and was appointed as the New Zealand authorised distributor for Seagate Crystal Reports and Seagate Crystal Information.
He says the company grew and by the beginning of 1998 it had offices in Auckland and Wellington and a staff of eight. In May last year Seagate Software said that because of its own growth it would prefer to have one of the large distributors of software products representing the brand in New Zealand and therefore Unilogic would need to reposition itself in its client/customer offerings.
"Effectively, in excess of 50% of the company's sales became lost to the replacement distributor (Melco) overnight."
Chater says the sales people attempted to change their operating role from that of handlers of in-bound inquiries to that of productive out-bound new business developers. He says that for a while it seemed to be successful, but then "for no apparent reason", in mid to late September, sales slumped dramatically.
"The pre-occupation by prospective purchasers with Y2K projects also had a dramatic impact on the company's ability to finalise sales." He says the company tried to weather it for some time, but in early November he offered the sales people redundancy or a change to commission only pay. All five chose redundancy. The three non-sales support staff also left.