On 15 October, The High Court at Auckland placed The Magazine Marketing Company (TMMC), which was founded in 2008 by Stuart Shepherd, into liquidation for failing to meet payment obligations, which included overdue GST, PAYE, KiwiSaver employee deductions, KiwiSaver employer contributions, student loan employee deductions and income tax.
KPMG, which was appointed as the company’s liquidator, released its first report on 19 November, revealing additional details about the process thus far.
After an initial discussion with Shepherd, KPMG decided for the business to keep trading while a purchaser was sought. Shortly thereafter, two of the company’s seven employees were made redundant in an effort to reduce costs.
This was followed by a further two redundancies when a pair of the company’s largest suppliers—not named in the report—refused to provide stock on account of the predicament the company was in.
In its search for a potential buyer, KPMG sent out confidentiality agreements to seven interested parties, six of which responded.
According to the report, negotiations reached advanced stages with three of the parties but they could not reach an agreement on “an acceptable price.”
Having been unable to find a purchaser, KPMG made the decision on 28 October to cease business operations and wind up the company’s affairs.
To date, the liquidators have received debtor payments of $71,771 from companies that worked with TMMC, with receipts suggesting that an estimated $25,000 will still be received. In addition to this, KPMG has also raised $3,952 from the sale of furniture.
This capital will however only take a small chunk out of what is owed to the creditors, with the report showing that KPMG has received claims totalling $111,883 from preferential creditors (employees and revenue authorities) and $218,651 from unsecured creditors (those who do not hold a security interest in the company).
The amount claimed by secured creditors (those that do hold a security interest) was not included, but an annexed list showed that Fuji Xerox, Flexitrent Capital, BNZ and Heartland Bank were the only organisations included in this category.
The final amount owed will only be released after 15 December, which has been set as the deadline for creditors to make their claims.