An immediate sale of Tellen Systems assets was blocked by the High Court following allegations insolvency practitioner Kevin Davies was in league with a Tellen shareholder in a ploy to spirit assets out of the company following its improvident purchase of competitor Sedco New Zealand.
Tellen Systems NZ (2013) Ltd provided telco services primarily to the health care and aged care sectors. It is owned by Fibre Investments Ltd which in turn is ultimately controlled by Neil Simmonds. Tellen’s purchase of a majority stake in Simon William’s Sedco New Zealand Ltd was bad news all round; Tellen alleges Sedco was insolvent. Sedco also provided communication services to the health sector. Subsequent litigation saw Tellen ordered to pay Mr Williams some $560,000 and also contribute to Sedco debts guaranteed by Mr Williams.
In October 2021, Mr Williams forced Tellen Systems into liquidation following failure to pay the High Court $560,000 judgment. Weeks earlier, Tellen shareholder Fibre Investments put Tellen into receivership claiming to be a secured creditor with the right to seize all Tellen’s assets.
Tellen liquidators allege Fibre Investments is not a creditor to the amount it claims and that it is trying to sell Tellen assets at a knock-down price without following proper receivership procedures.
Tellen liquidators told the High Court that receiver Kevin Davies has been stalling when asked to prove the existence of Fibre Investment’s claimed secured debt. Fibre Investments claims to be owed in excess of two million dollars as a secured creditor. Liquidators also allege the receiver is manipulating the sale process. It is claimed no independent valuation was obtained for Tellen assets, that the proposed sale was poorly marketed with the number of potential bidders limited because of the receiver’s demand intending buyers post a $50,000 bond before getting access to company information, and that a proposed sale of Tellen assets to interests associated with Mr Simmonds at $520,000 is a sale at gross undervalue. Mr Simmonds made his $520,000 bid under the name Dark Horse Technologies.
Justice Doogue issued an interim injunction blocking any sale until these issues are sorted out.
Tellen Systems NZ (2013) Ltd v. Fibre Investments Ltd – High Court (14.01.22)
22.029