Wishbone creditors’ grim outlook, owed $6.8m
Creditors are set to be left with a significant shortfall after liabilities for popular cafe chain Wishbone have more than trebled since the initial liquidator’s report.
The Woodward Group, which operated the Wishbone food brand, was placed into liquidation on August 14 last year following declining sales in its retail stores.
The Herald reported later that month that the company owed an estimated $2.32 million.
But yesterday, Mohammed Jan of insolvency firm Liquidation Management released the sixmonthly liquidator’s report on the business.
According to the report, Woodward Group owes $6,812,944 and has assets totalling $452,189. That leaves a significant shortfall of more than $6.3m.
Preferential creditors are owed $802,601, of which the Inland Revenue Department has filed a preferential claim of $462,640.16.
Preferential claims have also been received from 86 staff totalling $339,961.44.
Secured creditors are owed $4,113,465, a figure previously unknown in the first liquidator’s report. Three secured creditors filed a claim, the report said.
And unsecured creditors are owed $1,896,878, up from the more than $1.2m initially estimated.
Creditors include NZ Post, Meridian Energy, Precinct Properties NZ, Heartland Bank, Office Max, Christchurch Airport and Trade Me Jobs.
The Woodward Group was established in 1999 in Wellington by William Scarlet and Andrea GibsonScarlett.
Wishbone had 17 stores at the time of its liquidation, mostly in Wellington, Auckland, Christchurch, and Dunedin with about 110 staff.
The company’s pre-made meal packs were also sold in Countdown and Foodstuff supermarkets.
Its failure was blamed on declining sales due to the new hybrid workfrom-home model.
The liquidator’s report said inflation, recession, wages, and increased costs of goods had affected the business immensely.
“The company had also incurred significant tax and creditors’ debt and was not in a position to trade out. Some suppliers had stopped credit while others had reduced their credit limits, which made it incredibly difficult to obtain supplies,” the report said.
“The directors tried to keep the business afloat by investing more capital but ran out of cash flow and funds.”
According to the report, BNZ was not willing to continue to support the company funding, and another private investor refinanced the loans, leading to shareholders putting the company into liquidation.
The liquidator had been unsuccessful in selling the business, despite receiving 26 inquiries from prospective buyers of the company, factory, and individual outlets.