JHR FISK AND DJ BRIDGEMAN AS LIQUIDATORS OF FCS LOANS LIMITED (IN LIQUIDATION) HC WN CIV-2013-485-840

JHR FISK AND DJ BRIDGEMAN AS LIQUIDATORS OF FCS LOANS LIMITED (IN LIQUIDATION) HC WN CIV-2013-485-840

The court granted the exemption under s255(4) because the direct mailing cost to 3,141 preference shareholders was disproportionate to the minimal benefit given the improbability of any dividend, and publication of the six monthly report on the Registrar of Companies and firm website (with a notifying letter) provided a reasonable alternative that conserved estate funds for creditors.

Citation
openlaw-cd8c623a_15a2_4278_97b4_d37552bc45e8.pdf
Parties
Applicant Liquidator: John Howard Ross Fisk; Applicant Liquidator: David John Bridgeman; Company Subject: FCS Loans Limited (previously South Canterbury Finance Limited)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
23 May 2013
Procedural Posture
Application for Exemption Under S255(4) Companies Act 1993 / Without Notice Originating Application Decided on Papers; Judgment Granting Exemption
Outcome
Application granted; exemption from compliance with s255(2)(d) Companies Act 1993 granted
Legal Topics
Liquidators' Reporting Obligations, Preference Shareholders, Exemption From Statutory Mailing Requirements, Costs Proportionality in Liquidation, Registrar of Companies Publication
Company Law Insolvency Law Civil Procedure Liquidators' Reporting Obligations Preference Shareholders Exemption From Statutory Mailing Requirements Costs Proportionality in Liquidation Registrar of Companies Publication

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Parties

John Howard Ross Fisk

Applicant Liquidator

David John Bridgeman

Applicant Liquidator

FCS Loans Limited (previously South Canterbury Finance Limited)

Company Subject

Procedural Posture

Application for Exemption Under S255(4) Companies Act 1993 / Without Notice Originating Application Decided on Papers; Judgment Granting Exemption

Legal Issues

  1. 1 Whether liquidators should be exempted from the s255(2)(d) obligation to mail six monthly reports to every preference shareholder
  2. 2 Whether the direct mail-out cost is disproportionate to the benefit to preference shareholders given improbability of dividend
  3. 3 Whether publication via Registrar and firm website is an adequate alternative to individual mailings

Ratio Decidendi

The court granted the exemption under s255(4) because the direct mailing cost to 3,141 preference shareholders was disproportionate to the minimal benefit given the improbability of any dividend, and publication of the six monthly report on the Registrar of Companies and firm website (with a notifying letter) provided a reasonable alternative that conserved estate funds for creditors.

Court Disposition

Application granted; exemption from compliance with s255(2)(d) Companies Act 1993 granted

Orders

  • Leave granted to file the without notice originating application pursuant to Part 19 of the High Court Rules
  • Applicants exempted from compliance with s255(2)(d) of the Companies Act 1993 as to sending to every preference shareholder the liquidator's six monthly report