ATNZ’s books positive for creditors

The liquidation of Autoterminal New Zealand Ltd (ATNZ) may not end in doom and gloom for creditors, according to a new report.

A statement of the company’s affairs  – included in the liquidators’ first report to creditors and shareholders  – reveals its assets as of September 11 totalled more than $41 million, which does not include the value of vehicle stock on hand, plant and equipment, office equipment and intellectual property.

At the same time, 40 creditors have come forward so far claiming they are owed a combined $39.52m.

The vehicle importer and wholesaler began the liquidation process on September 11 and the relevant registered documents were lodged on the Companies Register two days later.

A special resolution of shareholders made the move following ATNZ being ordered by high court in Hamilton to pay $38.65m – less a credit that is still to be determined – under a vehicle-supply agreement (VSA) with IBC Japan Ltd.

Steven Khov and Kieran Jones, of Khov Jones, and Thomas Rodewald, of Rodewald Consulting – pictured from left to right – have been appointed as joint liquidators.

Their first report was issued on September 16 and lists 40 creditors, with the Imported Motor Vehicle Industry Association (VIA), VTNZ, Customs and Inland Revenue among those seeking money from ATNZ. 

The company’s financial situation is also contained in the document, although the full extent of assets and liabilities have not been disclosed or remain unknown at this stage

The amount claimed by unsecured creditors so far is $38.99 million, which includes the IBC judgement of $38.65m

On top of that, liabilities to preferential creditors, which includes staff wages, staff holiday pay, and money owing to Inland Revenue and Customs, totals $533,235.

With regards to ATNZ’s assets, the statement shows the company had $3.96m cash on hand as of September 11 and it is owed $31.36m from customers.

Its disclosed assets total $41.01m, but the value of items such as vehicle inventory on hand and office equipment remain secret for now as the liquidators fear such information may be prejudicial to a future sale.

“It is too early to determine the realisable value of any claims available to the liquidators,” it adds. 

“The liquidators are also investigating whether there are any other assets and/or potential claims which may give rise to additional recoveries for the benefit of creditors.

“The liquidators will take steps to secure and realise the assets of the company and continue their investigations into the affairs of the company to determine if there are any insolvent transactions and/or breaches of any relevant legislation by the company or its officers. 

“It is not practicable to estimate the date of completion of the liquidation or if there will be any distribution at this stage.”

Lockdown slows process

The liquidators note that ATNZ, which started trading in April 2000 and operates from leased premises in Manukau, is currently shuttered until Covid-19 alert levels in Auckland abate. 

“The lockdown has also partially impended the liquidators’ ability to carry out their usual functions as liquidators of the company,” says the report.

“Steps have been taken to take control of the company’s books and records following our appointment. 

“However, physical records located at the company’s office are not able to be accessed until the applicable lockdown alert levels allow.” 

At the time of writing the report, the liquidators say between 150 and 200 vehicles were at the Manukau site. Most of those were either owned by ATNZ, or provisionally sold by the company pending compliance. 

“We understand the company sold fully complied vehicles to a number of car dealerships around New Zealand and at the date of our appointment held a substantial debtors ledger,” they add. 

“Steps will be taken by the liquidators to review the debtor’s ledger, engage with the dealerships and collect the amounts outstanding as they become due.”

The liquidators note the company employed 21 staff and advice was being sought over any entitlement to apply for an additional Covid wage subsidy.

Legal proceedings

The report says the high court decision against ATNZ is subject to an appeal by the company, but the liquidators have not yet assessed the merits of the appeal. ATNZ is also understood to have paid security for costs to the Court of Appeal. 

“We understand that the failure of the company is attributable to a substantial dispute between shareholders of the company, for which the company was part of a wider group enterprise encompassing IBC which is headquartered primarily from Japan.”

The document continues that the liquidators are also aware of concerns raised by IBC regarding the conduct of the company’s director during the two years preceding liquidation. 

Khov, Jones and Rodewald plan to review the affairs of the company including the available financial records. 

“The liquidators will take steps to secure and realise the assets of the company and continue their investigations into the affairs of the company to determine if there are any insolvent transactions and/or breaches of any relevant legislation by the company or its officers.” 

They add ATNZ is also subject to a demand for repayment of $2.9m pertaining to an alleged voidable transaction with a previous debtor that is in liquidation – 3224647 Ltd, which was formerly called Nigel Thompson Motor Company Ltd.

The liquidators say they are investigating the merits of this dispute.