Financially overstretched, Simon Francis Scott and Leone Margaret Scott of Beckenham in Christchurch have done a deal with creditors paying eighteen cents in the dollar. The two have interests in a swathe of businesses, primarily in the hospitality sector according to Companies Office records.
In October 2020, a deal was put to creditors owed some $1.44 million. Negotiations were put on hold when a further creditor surfaced. claiming $600,000 on guarantees for unpaid commercial rent.
The High Court was told of a reconvened creditors’ meeting two weeks later offering eighteen cents in the dollar on creditors’ claims of just over $978,000. In the interim, claims by some creditors had been refined and the Scotts had agreed to kick in some more money. All up, $100,000 was promised from their family trust with the Scotts paying a further $75,000 over time.
For an Insolvency Act part-payment scheme to stick, a majority of creditors owed 75 per cent of debt by value must agree, with High Court approval subsequently given. The High Court was told two creditors out of thirteen voted against. Approval by value only just reached the 75 per cent hurdle. In giving approval to the part-payment scheme, associate judge Lester commented proposed Insolvency Act schemes of arrangement should not be structured as a joint proposal like the Scotts; instead there should be two mirror proposals, each conditional on approval of the other. Insolvency Act rules govern individual insolvencies, not joint insolvencies.
re Scott – High Court (15.03.21)
21.052